On July 14, 2021, the Québec Minister of Energy and Natural Resources, Jonatan Julien, made an announcement regarding the positioning of wind energy in Quebec's energy portfolio. In his prepared remarks, Minister Julien announced the adoption of an order-in-council (the "Order-in-council") requesting that Hydro-Québec launch a call for tenders for new wind energy resources to meet long-term energy and power needs commencing as early as 2026. According to the vision presented, the call for tenders must include a block of 300 megawatts ("MW") of wind energy.
Concurrently to this announcement, the Quebec government has published two draft regulations. The first (the "300 MW regulation") adopts analogous language to the Order-in-council as it calls for a 300 MW block dedicated to wind energy, while the second (the "480 MW regulation") requests that Hydro-Québec proceed with a call for tenders for an additional 480 MW of renewable energy. Under these regulations, Hydro-Québec will be required to conduct both calls for tenders by Dec. 31, 2021.
These measures were motivated by an increase in electricity demand from new markets such as agricultural greenhouses and electric vehicles. Meeting these demands with renewable generation is consistent with the Quebec government's commitment to reducing its greenhouse gas emissions by 37 per cent by 2030 and achieving carbon neutrality by 2050 as part of its 2030 Plan for a Green Economy.
The announcement also sends a clear signal to the local wind energy industry that Quebec intends to support its development as the Order-in-council includes various domestic content requirements. Local equity participation of approximately 50 per cent is required for a project to be eligible to bid. Further, at least 60 per cent of project expenditures must target Quebec content including 35 per cent incurred in the Regional County Municipality where the project will be located. Furthermore, the promoters of the project must pay $5,700 (adjusted annually for inflation) per MW each year to the local municipality or administration.
The contracts to be awarded will have a 30-year term, demonstrating the government's long-term commitment to renewable energy. More renewable energy calls for tenders are also planned in the near future as projected demand for electricity is estimated to reach 1400 MW of capacity and 1.5 terawatt-hours of energy annually by 2029. In its press release, the Quebec government announced that an important part of the future calls for tenders will be dedicated to wind energy.
Our team will continue to monitor the evolution of the tender process. Should you have any specific questions about this article or would like to discuss it further, you can contact the authors or a member of our Energy Law Group.