Business

Unfavorable weather conditions lead Hydro-Québec to reduce its exports

Unfavorable weather conditions lead Hydro-Québec to reduce its exports
(Chelsea Generating Station. Credit: Hydro-Quebec)

The Quebec Ministry of Finance said in a recent quarterly report that part of the anticipated drop in government revenue is attributable to Hydro-Quebec reducing its electricity exports amidst “unfavorable weather conditions.”

Hydro-Québec generates, transmits and distributes electricity. It is Canada’s largest electricity producer and one of the largest hydroelectric producers in the world, sourcing most of its electricity supply from hydroelectric generating stations. Its sole shareholder is the Quebec government.

On an annual basis from April 2023 to March 2024, revenues from Hydro-Québec are expected to be $650 million lower than previously forecast due to a reduction in electricity export volumes, according to a release. A weak snow cover at the end of winter, a less significant spring flood than usual, and modest precipitation this past summer in northern Quebec reduced the water supply to the reservoirs. To guarantee optimal management of resources, Hydro-Québec reduces its exports via short-term markets.

This decision has no impact on Quebec’s energy supply and long-term commitments with neighboring markets, Hydro-Quebec said. In terms of water supply, Hydro-Québec has reservoirs that store water over several years, giving it great flexibility and securing long-term supplies. In addition, the fact that the reservoirs are dispersed over an immense territory contributes to the security of supply.

The company said it sometimes experiences drier periods in certain regions, hydraulicity being a cyclical phenomenon. In the longer term, forecasts taking into account climate change suggest an increase of 5% to 10% in precipitation in northern Quebec, where its large reservoirs are located.