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Peak Demand Management | Costs are exploding

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Waiting until night to turn on the dishwasher will not be enough to help Hydro-Quebec manage peak winter demand, which will explode in volume and cost over the next few years.

The state-owned company paid out $59.5 million in 2023 for its various tools to reduce consumption during peak winter periods. This annual cost will climb to nearly 700 million in 2032, forecasts Hydro-Quebec.

In fact, it will cost even more expensive, estimates Jean-Pierre Finet, analyst with the Regrouping of the environmental organizations in energy. “It doesn’t include the cost of Hilo, for example,” he points out.

What Hydro-Quebec confirms. Hilo is not included in these forecasts, said its spokesperson Cendrix Bouchard, nor are other peak management tools such as dynamic pricing (winter credit and Flex rate).

For the winter that just ended, the 20,000 customers of the Hilo subsidiary received 2.8 million in rewards for having moved their electricity consumption, in addition to having benefited from financial assistance for the purchase and the installation of smart thermostats.

The cost of the other means available to the electricity distributor varies between 9.7 cents per kilowatt hour for purchases from neighboring networks (average cost in winter 2023), up to 61 cents per kilowatt hour for compensation paid to companies that reduce their consumption during critical hours.

Hydro-Quebec can also use its Bécancour thermal power station if necessary, which it did for 23 hours on February 3 and 4, for a cost that is not specified, but which is linked to the cost of fuel.

The relatively mild winter that has just ended gives an idea of ​​the challenges that the Hydro-Québec system will have to face in the years to come.

The historic record for electricity consumption, which dated back to the previous winter, was shattered, despite milder temperatures. The electricity grid had to supply 2000 megawatts more than in the winter of 2021-2022.

The cost of supplying power to meet peak demand increases every year, but from 2026 it will skyrocket. It is the end of surpluses and the need to find new supplies (wind farms or new power plants) that explain the explosion in costs, according to Hydro-Québec.

The agreement signed by Hydro-Québec with Énergir to convert oil heating to dual energy rather than all electricity aims to mitigate the growing impact of peak demand on the electricity grid.

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