Hydro-Énergir deal less profitable than electricity, study concludes

The deal between the government corporation and its competitor was approved by the Régie de l’énergie last May. It aims to convert gas heating systems to dual energy to reduce greenhouse gases.

As part of the offer, customers can use electricity for 70% of their heating needs and natural gas as a backup source, especially when it’s winter and Crown Corporation wants to save energy to get through winter peaks when demand is higher.

The Écohabitation study, commissioned by several groups that denounce the Hydro-Énergir partnership, notably Équiterre, Greenpeace and Nature Québec, sheds new light on the savings promised by the government corporation.

It concludes that dual energy costs between 20 and 32% more than Hydro’s Flex D rate electricity (dynamic pricing system) using heat storage and heat pump central heating.

At 2022 rates, it would cost $1,196 per year for the electric system and $1,470 for dual energy in existing buildings. The difference is greater for new homes, $892 for an electric system, $1,176 for dual energy. According to their calculations, it is also twice as expensive to heat with natural gas.

With the war in Ukraine and rising gas prices, electricity’s competitive advantage could increase further in the future, the study suggests.

Heat accumulator

The thermal accumulator, which is still little known to consumers, enables heating without fuel and is characterized by the peculiarity of heat accumulation. A way to decarbonize buildings while effectively managing peak winter electricity demand, a challenge for Hydro-Québecsay the groups.

In the United States, you see a lot of this type of dynamic pricing system. In Ontario, as in Europe, there are heat accumulators. This market can also develop hereassured Jean-Pierre Finet, analyst of the Group of Environmental Organizations in Energy (ROEE).

The cost of purchasing and installing this equipment is not factored into the study, but the groups note that customers can benefit from subsidies from Hydro-Québec (up to $10,000 per battery, $5,000 per heat pump).

Too many factors to consider, says Hydro

Contacted by Radio-Canada, Hydro-Québec confirmed it could respond more completely after analysis, but rejects the conclusion of the study.

Waving flag.

Flag with Hydro-Québec logo

Photo: Radio-Canada / Jean-Claude Taliana

One thing is for sure, we cannot prove that one option is systematically better than the other because there are too many factors to consider.spokesman Maxence Huard-Lefebvre said by email.

According to the latter, all possibilities must be used to ensure the energy transition. We will need a well-stocked toolbox […] Dynamic pricing, thermal accumulators, heat pumps and dual energy are some of them.

According to the state-owned company, despite the advertising campaign and subsidy, only 40 heat storage systems are installed.

Agreement terminated

The Hydro-Énergir deal has been denounced several times by consumer and environmental groups. As part of the partnership, Hydro will pay its competitor 400 million in compensation, which will increase electricity prices by 1.43% by 2030.

The total bill could reach as much as 2.4 billion, according to ROEE, when Hydro-Québec finishes compensating Énergir’s customers.

Pushing dual energy is nonsense, it is much more economical to convert to electricity. Dual natural gas power is a poisoned gift for current and future Énergir customers and for Hydro-Québec customers who will see their bills increasesays Mr. Finet.

Opponents also see the partnership as a way to preserve natural gas for years to come. They point out that most of the greenhouse gas emissions associated with the use of new buildings come from natural gas heating.

Two Énergir trucks are parked.

Énergir vehicles

Photo: Radio-Canada / Marie-Helene Paquin

%. Il y a d’autres solutions qui décarbonent à 100%.”,”text”:”Il y a plusieurs choses qui accrochent dans cette entente. On doute des motifs en arrière de cela. On ne décarbone pas, on décarbone à 70%. Il y a d’autres solutions qui décarbonent à 100%.”}}”>There are several things in this deal. One doubts the motives behind it. We don’t decarbonize, we decarbonize 70%. There are other solutions that decarbonize 100%says Emmanuel Patola, president of the Environment Committee of the Canadian Union of Public Employees (CUPE-Québec), which represents several Hydro employees.

People who take up this offer will take it long term. For several years, we have collectively closed ourselves off in the use of gas. Hydro says it’s the only solution. But no, the study shows us that there is another more effective and less expensive solution.continues.

Énergir, formerly Gaz Métro, is 100% owned by Quebec. It is 80.9% owned by the Caisse de depot et placement du Québec and 19.1% by the Solidarity Fund FTQ. The group believes that the partnership with Hydro is primarily aimed at helping the natural gas distributor transition to energy.

Everyone was surprised when the Caisse bought it from Enbridge […] We have the impression that we want to save Énergir at all costs because of this bad investment by the Caissebelieves Mr. Finet.

Hydro claims that this partnership with Énergir, on the other hand, will allow the Quebec company to save $1.7 billion compared to the complete electrification of natural gas customers.

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