Quebec’s most recent hydroelectric project is La Romaine, a 1,550-Megawatt complex on the Rivière Romaine north of the town of Havre-Saint-Pierre. Built at a cost of $7.4-billion, it was inaugurated officially in October. Seen here is the La Romaine 3 dam at the Mista camp, the site of one of the project’s four hydropower generating stations.Jacques Boissinot/The Canadian Press
The village of La Romaine sits on the northern flank of the Gulf of St. Lawrence in a wind-swept place that the Innu people call Unamen Shipu, or “ocher earth” – a reference to the red colour seen on the banks of the nearby Oloman river snaking upland. Some 400 kilometres north-east of Sept-Îles, it’s reachable only by air and water except during the coldest months, when the government carves out a snow road to nearby communities. Locals like to say it’s their winter freedom.
It’s here, in this reserve of 1,200 Innu inhabitants, that Hydro-Québec chief executive Michael Sabia landed on a Wednesday in late November. Greeted at the community’s political offices, Mr. Sabia shared a lunch of caribou and traditional bread with local leaders and later spoke of his desire to rectify the past and make the Unamen Shipu Innu partners in the nearby Lac-Robertson power station, built on their territory in the early 1990s without any compensation. He handed a letter to the community’s former chief that apologized for the affront.
Making amends won’t be easy.
“You can just feel it in the room, this sort of méfiance, of mistrust,” Mr. Sabia said in a recent interview with The Globe and Mail. “It’s understandable because you know these folks were told, ‘We’ll do A and B.’ And then we didn’t … We just completely rolled over this community.”
Hydro-Québec CEO Michael Sabia speaks to the media about the company’s plans for the future on Nov. 2 in Montreal.Ryan Remiorz/The Canadian Press
There’s a reason one of Canada’s most prominent business leaders is speaking so plainly. Plucked for the Hydro job this past summer from his role as federal deputy minister of finance, Mr. Sabia recently unveiled a master plan for Quebec’s energy future that’s unlike anything we’ve seen in scope and substance from a provincial power utility in Canada. And for this societal transformation to work, he’ll have to persuade Quebeckers in every corner of the province to get on board, from Innu communities to the smallest hamlets and biggest cities.
The Sabia blueprint will see the utility spend as much as $185-billion to transform Quebec’s energy landscape from now until 2035, including an estimated $110-billion on new clean power generation facilities and $50-billion to improve the reliability of the electrical grid. The goal: Decarbonize Quebec’s economy and build wealth by making the province a magnet for innovative companies using and producing green energy.
The numbers are mind-boggling in size and so are the images that Mr. Sabia evokes. Build thousands of new wind power turbines, enough to cover 15 times the area of the Montreal island. Add 5,000 km of new transmission lines, roughly the distance by air from Vancouver to St. John’s. Quicken the pace of investment to $16-billion per year, twice what was spent annually during the construction in the 1970s and 1980s of the James Bay hydropower stations – facilities on which Hydro-Québec built its reputation as one of the world’s biggest producers of low-carbon electricity.
“This is not the time for half measures,” Mr. Sabia told a business audience at a lunch hosted by the Chamber of Commerce of Metropolitan Montreal last month. Clean energy will be the decisive factor in the global competition between economies and Quebec has to act, he said. “The plan is ambitious because there is a lot at stake.”
Despite the United Nations climate summit ending this past week with no clear global commitment to phasing out fossil fuels, governments in the United States and Europe are pouring billions of dollars into renewable energy in a bid to transform their economies and reverse the effects of climate change, underscored by the forest fires, floods and severe storms of the past year. Quebec’s bounty of hydropower gives it a head start but the task is colossal, and the path mined with obstacles – from finding money to finance all these projects to securing workers and public acceptance. Even something as basic as locking in supply of wind turbines could be problematic if equipment manufacturers cool on Quebec for better contracts elsewhere.
Hydro-Québec is deeply entwined with Quebec’s modern history, the product of a radical coming-of-age that culminated when Premier Jean Lesage nationalized private electricity distributors in the 1960s. As the utility put its faith in a hydroelectric future, it also became a symbol of francophone power. It’s been a money machine and source of pride for the province ever since.
From left, Mr. Sabia, former Quebec premier Jean Charest and current Premier Francois Legault unveil a commemorative plaque during the inauguration of the La Romaine hydroelectric plant, on Oct. 12.Jacques Boissinot/The Canadian Press
Now, Quebec is counting on Mr. Sabia, an anglophone from Ontario who previously led pension fund giant Caisse de dépôt et placement du Québec, to steer it through its biggest test in decades. How the bespectacled executive with the wavy hair and a penchant for enumerating his ideas handles the adversity in the months and years ahead will test his managerial mettle, providing either a clear path or a cautionary tale for other provinces.
Can he rally political leaders to make the regulatory changes he needs? Can he begin to mend the broken trust of many First Nations communities? Can he find enough suppliers and tradespeople for new projects and help existing clients consume power differently? If he can, he’ll be remembered long after he leaves the CEO’s office on the 20th floor of the Hydro-Québec tower in Montreal.
“One of the most understated parts of this challenge here is the pace of it,” says Simon Langlois-Bertrand, an energy and climate policy analyst with the Institut de l’énergie Trottier at Polytechnique Montréal. “You need all these pieces that you don’t have and they’re very difficult to get: Labour, social acceptance and so on. But you also need to get it right the first time because if you hurt the confidence of the population, if you mismanage costs in a giant way in a very visible project, that’s going to make things even more difficult.”
Half of the energy Quebec uses still comes from oil, natural gas and other carbon-intensive sources, fuels that heat our buildings and power our cars. Transforming that into cleaner electricity means changing consumption habits and offering people options.
Additional energy and capacity
By 2035
+60 TWh
+8,000–9,000 MW
In addition to
the 13 TWh or
1,800 MW already
included in the
Electricity Supply
Plan published in
November 2022
7–9
Improved
1,600–1,800
consumption
Wind power
1,500–1,700
30–35
Hydropower
3,800–4,200
6–10
Other: Imports,
500–1,000
6–8
Renewable
400–600
natural gas
Energy (TWh)
Capacity (MW)
The average amount
of electricity available
during the year
The amount of electricity
available at a given point
in time
the globe and mail, Source: hydroquebec
Additional energy and capacity
By 2035
+60 TWh
+8,000–9,000 MW
In addition to
the 13 TWh or
1,800 MW already
included in the
Electricity Supply
Plan published in
November 2022
7–9
Improved
1,600–1,800
consumption
Wind power
1,500–1,700
30–35
Hydropower
3,800–4,200
6–10
Other: Imports,
500–1,000
6–8
Renewable
400–600
natural gas
Energy (TWh)
Capacity (MW)
The average amount
of electricity available
during the year
The amount of electricity
available at a given point
in time
the globe and mail, Source: hydroquebec
Additional energy and capacity
By 2035
+60 TWh
+8,000–9,000 MW
In addition to
the 13 TWh or
1,800 MW already
included in the
Electricity Supply
Plan published in
November 2022
7–9
Improved
1,600–1,800
consumption
Wind power
1,500–1,700
30–35
Hydropower
3,800–4,200
6–10
Other: Imports,
solar battery
500–1,000
6–8
Renewable
400–600
natural gas
Energy (TWh)
Capacity (MW)
The amount of electricity
available at a given point
in time
The average amount
of electricity available
during the year
the globe and mail, Source: hydroquebec
Hydro-Québec calculates that if the province wants to achieve carbon neutrality by 2050, Quebec will require between 150 and 200 terawatt hours (TWh) of additional electricity generated by renewables – double the electricity consumed today. To get there, the utility figures it will need another 60 TWh by 2035, which means adding between 8,000 and 9,000 megawatts of installed capacity. Put another way: Hydro-Québec will have to find the equivalent of the combined output of its massive La Grande-2, Manic-5 and Romaine hydroelectric complexes. And it has roughly a decade to do it.
Mr. Sabia sees three big opportunities to generate more electricity in the near term. First, while hunting for new hydroelectric development sites, upgrade the turbines on existing hydro facilities to crank out more power. Second, triple wind power generation – a decision that will usher in a major boom for producers and change the skyline in many regions. And third, use less power by getting far more aggressive on energy efficiency, and doubling the utility’s previous energy savings targets. He also wants to produce more solar and battery power, and to launch a pumped-storage hydroelectric facility.
Wind turbines in Thetford Mines, Que., in November, 2023. Mr. Sabia sees opportunity in tripling wind power generation – a decision that will usher in a major boom for producers and change the skyline in many regions.Mathieu Belanger/The Globe and Mail
Each of these solutions comes with its own set of problems.
Quebec Premier François Legault has repeatedly said that new hydroelectric dams need to be built in the province because wind and solar power are intermittent. Hydro-Québec is now updating its studies on possible dam locations. The only potential site the utility has publicly identified is the Rivière du Petit Mécatina in the Côte-Nord region, which happens to flow through the traditional lands of the Unamen Shipu Innu.
In La Romaine, the Innu population now dwarfs the French-speaking community in the former trading post, their livelihoods anchored in commercial lobster and crab fishing as well as a growing tourism and outfitter business. Kids playing street hockey share the road with all-terrain vehicles and offleash dogs, the whole of it overseen by newly-elected Chief Raymond Bellefleur, a soft-spoken character with a powerful build who wants to set up a local Innu police force in the name of greater community autonomy.
During his visit, Mr. Sabia took a helicopter tour of Innu land with Mr. Bellefleur before returning to the community as darkness set in. That was followed by a much larger meeting at the community centre where the Hydro executive talked about partnership for Lac Robertson. He flew out that night to get ahead of an incoming storm.
“I was left with a good impression,” Mr. Bellefleur said in an interview, adding Mr. Sabia is the first Hydro-Québec CEO to set foot on the reserve. Partnering with the utility would give the community revenue that will be put to good use, the chief said. But he is taking things one step at a time. “We’re not ready to talk about Mécatina. It’s too soon for that,” he said.
Such megaprojects are much harder to build now than in the past because construction costs are higher. Hydro-Québec’s legacy dams generate power for 3 cents per kilowatt-hour, but new dams face costs at least four times greater.
A aerial view of Romaine-1 Dam on the Romaine River in October 2021.Stephanie Foden/The Globe and Mail
Mr. Legault, centre, visits workers at the inauguration of the La Romaine hydroelectric plant, in October, 2023. Such megaprojects are increasingly harder to build due to rising construction costs.Jacques Boissinot/The Canadian Press
The utility’s most recent hydro development is the Romaine River project near Havre Saint-Pierre, which was built in four phases starting in 2009 and officially inaugurated this fall.
Indigenous communities and environmentalists are also more active. The Innu of Labrador are suing the utility for $4-billion in damages from when their traditional territories were flooded to build reservoirs decades ago. And nature groups like Fondation Rivières are urging Hydro-Québec to exhaust other options before developing natural environments that remain largely untouched.
Mr. Sabia is vowing that First Nations and Inuit people will be partners in clean energy projects and be offered financial participation in them, not through one-time cash settlements but rather through steady income streams. He calls the approach “economic reconciliation” and in this, he’s building on the efforts of his predecessor, Sophie Brochu, who was determined to shift Indigenous relations.
One deal Ms. Brochu struck before she left this past spring will see the utility share ownership of the Canadian portion of the Champlain Hudson Power Express transmission line with the Mohawk Council of Kahnawake. The line is major conduit slated to carry hydropower from Quebec’s far north to New York under a contract that will bring in billions of revenues for the provincial crown corporation.
In the corridors of power in Quebec City, Mr. Legault’s Coalition Avenir government is backing Mr. Sabia’s plan. Economy and Energy Minister Pierre Fitzgibbon says it’s in line with the government’s own intentions, and that his department is working on changes to legislation to give the utility greater flexibility to act faster.
Mr. Legault speaks with Mr. Sabia and Economy and Innovation Minister Pierre Fitzgibbon at the inauguration of the La Romaine hydroelectric plant, in October, 2023.Jacques Boissinot/The Canadian Press
There is an urgency to Mr. Sabia’s actions that wasn’t always visible from Hydro-Québec leaders before and there are clear reasons why. New hydroelectric installations take a decade or more to build. Other renewable energy projects can be done faster but also require lead time.
Hydro-Québec’s CEO has a key thing going for him in his efforts to make amends with Indigenous communities: He has no history with them, says Michel Paradis, an economic development consultant who previously worked as an adviser to Quebec’s secretariat of Aboriginal Affairs.
“What Mr. Sabia is doing now is the most important step in this process,” said Mr. Paradis. “The rest is just mechanics. If trust is built, the paths to reaching agreements will very likely take shape.”
Wind power provides a more immediate solution to Quebec’s energy needs but here again the challenges to development are immense. Wind farms have been in place in corners of the province like the Gaspé peninsula and Quebec City region for years. But there is significant public resistance to them in other places, particularly further south.
You just have to drive on Highway 15 from Montreal to the United States to see the divide between communities that have embraced wind power and those who haven’t. To the right near Saint-Mathieu, Kruger Energy’s towering wind turbines sweep the landscape like ghosts in the distance, their white shapes faintly discernible above the farmland below. To the left, there are just fields.
“Somehow the highway has kind of cut into acceptable and not acceptable,” says Michel Letellier, chief executive of Longueuil, Que.-based renewable power producer Innergex Inc. “There is plenty of wind in Quebec. But how fast we can develop it and how competitively we can do it is the question.”
Boralex Inc. wind turbines dot the landscape of Kinnear’s Mills in November, 2023.Mathieu Belanger/The Globe and Mail
Clean energy developers like Innergex, Boralex Inc. and Hydroméga have gotten better over the years at pitching their projects to local communities and winning approvals. But even they are struggling with the recent timelines imposed by Hydro-Québec as the need to find new power supplies becomes more acute.
The utility issued a call for tenders in March this year for 1,500 megawatts of wind power, specifying that bidders had to carry out their projects in one of 10 geographies – places near existing substations – so that the wind farms could be connected to the grid faster and at a reasonable cost. It gave bidders roughly five months to submit their documentation.
Hydroméga targeted a site near Valleyfield, Que. With no direct experience with the technology and little warning of the producer’s plans, many residents there got spooked by the prospect of 205-metre-tall turbines in their midst. The municipal council refused to endorse the project, saying there wasn’t sufficient time to consider it.
“We won’t go into a lobster trap” we can’t get out of, Valleyfield Mayor Miguel Lemieux reassured residents during a heated municipal council meeting in August. “For some people, this is really emotional.”
Similar scenes are playing out across Quebec. One of the main groups voicing its concerns on wind power development is the agricultural lobby.
“You put wind turbines in the desert where there’s nobody, great. But you don’t put them in the heart of our rural communities,” says Charles-Félix Ross, director general of the Union des Producteurs Agricole, a trade union that represents 42,000 farmers and forestry producers in the province. “We need renewable energy. But the way things are happening now is pretty chaotic.”
Stephane Desdunes is a senior executive with EDF Renewables, a U.S. clean power producer that’s won three contracts this year to supply Hydro-Québec. He’s applauding Mr. Sabia’s plan, saying it provides opportunity and predictability for the industry. But he says it also comes with major challenges, chiefly transmission grid limitations and labour.
A Hydro-Québec crew works on a power line following an ice storm in Montreal, in April 2023. The utility estimates it will need 15,000 workers to build out the infrastructure it is planning in 2025 and 55,000 by 2033.Graham Hughes/The Canadian Press
The utility estimates it will need 15,000 workers to build out the infrastructure it’s planning in 2025 and 55,000 by 2033. That’s equivalent to 20 per cent of the province’s current construction workforce at peak. Finding those workers, along with engineers and scientists, will be an enormous puzzle.
Among the solutions being bandied about are hiring more women who want to work in construction, and shifting workers from other areas of the economy. Still, it might not be enough to address the problem.
Quebec’s construction unions have to contribute to the possible solutions, Mr. Sabia says, for example by loosening the rules governing who can do what work. Talks have already started with labour leaders on that front. The Hydro-Québec leader characterizes his entire endeavour as a “Plan de société,” a French term meaning a societal pact in which everyone needs to be involved.
Government has also experienced a wave of people leaving and retiring that threatens to slow things down, Mr. Desdunes says, particularly on project approvals. “The permitting bottleneck scares me,” he said. “In terms of labour on the government side to make sure they have enough people. And even labour on our side, to make sure we have enough biologists and all those folks to get it done.”
Then there’s the financing of these projects. Historically, Hydro-Québec has largely used cash from operations and selling bonds to finance its capital spending. Going forward, it will also explore a range of other options that could include structured credit.
Surging interest rates and commodity costs over the past two years have changed the economics for many projects. For example, Denmark’s Orsted in November pulled out of a consortium owing to bid on offshore wind projects in Norway and also scrapped two U.S. offshore wind projects, blaming rising costs and supply bottlenecks.
Mr. Sabia says he’s not worried about financing because markets are big and looking for attractive green energy investments. As for execution, he says the sheer volume of power the utility will develop or buy will play in its favour by attracting the biggest suppliers and operators.
Patrick Decostre, CEO of Boralex, says the viability of clean energy projects depends on several factors, including where they’re located. Boralex’s Apuiat wind project in Port-Cartier, Que., for example, is bolstered by a 30-year power purchase agreement with Hydro-Québec as well as the participation of local Innu communities as project co-owners. “There is still a very important appetite from lenders in Quebec, in Europe and in Asia to finance long-term contracts with Hydro-Québec,” he said.
Mr. Legault announces the construction of Boralex’s Apuiat wind project in Port-Cartier, Que., in partnership with the Innu nation of Uashat mak Mani-utenam, in Feb. 2021.Jacques Boissinot/The Canadian Press
Perhaps the biggest wildcard in Mr. Sabia’s plan to generate more power is what Quebec is able to do with the power it already has. The CEO wants to cut consumption, with a target of doubling energy savings to free up between 1,600 and 1,800 Megawatts of additional power by 2035.
Energy experts have been calling for action along these lines for years. But changing customer behaviour also means debunking a commonly held view among Quebeckers that they have a God-given right to cheap power – a belief reinforced by a government edict that reserves a volume of electricity called the “heritage block” at attractive rates for residents. The predictable result is that Quebec is one of the most energy-hungry places on the planet.
Pierre-Olivier Pineau, an energy specialist at Montreal’s HEC business school, applauds Mr. Sabia for focusing on efficiency. He says it makes no sense to build any new significant power capacity without first optimizing what we already have.
“Quebeckers, and Canadians in general, aren’t the most exemplary energy consumers,” he said. “It would be stupid just to electrify and decarbonize our energy obesity.”
The trouble is that Hydro-Québec doesn’t hold all the keys to the efficiency effort, Mr. Pineau says. Sure, it can offer incentives to speed up the rollout of things like heat pumps and smart thermostats. But it’s very difficult to get people to use less electricity when Quebec’s power is so cheap relative to that in other provinces and states, Mr. Pineau says.
It’s not the utility that sets rates and conditions of service but rather the Régie de l’énergie, Quebec’s energy regulator. Nor does the utility have primary oversight over how buildings are heated and lit, which is the purview of another regulator enforcing building and construction codes.
One of Mr. Sabia’s main strategies will be to offer Hydro-Québec customers more options to encourage them to think about electricity as a limited resource. For example, he wants to offer more discounts to people who reduce or change their consumption during the coldest days, when power usage is at its peak. That goes for companies and businesses as well, and he’s vowing to dispatch teams of service experts to help those customers shift their energy use to more optimal times and adopt more efficient equipment.
Those who think this won’t work might be missing the main idea: That Hydro-Québec will spend as much as it takes to claw back power volumes, as long as that sum is less than the cost of building new generation facilities. “And that’s a pretty big carrot,” Mr. Sabia says. He’s not discouraged that barely 5 per cent of the company’s customers currently take advantage of existing power-saving discounts, calling the remaining 95 per cent a major untapped opportunity.
Quebec needs to adopt a highly structural solution to save electricity, says Mr. Langlois-Bertrand, the energy researcher at Trottier. That could include general rate increases, more sophisticated pricing systems, or caps on how much power people can use at the same time. So, if you have four garages and a monster home you want to heat, you can, but you’ll pay a higher price because it’s beyond your allotted limit.
The irony is that Quebeckers are being asked to embrace an all-electric future at the same time they’re being told they need to use less electricity, Mr. Langlois-Bertrand says. He says the job of explaining to them how the province will navigate all of this shouldn’t fall to Mr. Sabia alone. Political leaders will have to step up.
“I don’t think this plan is intended to be the truth with a capital T of what needs to happen. Mr. Langlois-Bertrand says. “But it gives you a sense of the order of magnitude of things.”
Mr. Sabia speaks at the inauguration of the La Romaine hydroelectric plant, on Oct. 12. Hydro-Québec says it plans to spend between $155 billion and $185 billion by 2035 as it looks to increase generating capacity and improve the reliability of its network.Jacques Boissinot/The Canadian Press
For Mr. Sabia, Hydro-Québec now has a new opportunity to drive Quebec’s economic development and steer it to a net-zero emissions future in much the same way the Caisse de dépôt created greater prosperity for Quebeckers under his leadership.
The Caisse was at a low point in its history when he joined in March, 2009. It had booked a $40-billion annual loss it blamed on crashing stocks and a depreciating Canadian dollar. By the time he left in February, 2020, the pension fund manager had been delivering steady returns averaging about 10 per cent annually over the previous decade. Meanwhile, assets more than doubled to about $340-billion.
Critics that were so vocal at the start of Mr. Sabia’s tenure at the Caisse eventually went silent. More importantly, the CEO was able to motivate a team internally with the belief that what they were doing mattered hugely for current and future generations of Quebeckers. The same is true now at Hydro-Québec, he says.
“This is the moment for this institution to step up,” Mr. Sabia said. “It’s about low-carbon and prosperity.”