We’ve been hearing a lot about electricity surpluses lately. What is your position?
Much has been written in the newspapers about electricity surpluses, which appear to be a key challenge across Canada right now. Cyclical imbalances between supply and demand are common for any industry, and particularly so for the electricity sector, where supply and demand are notably desynchronized. Innergex has been active in this sector for more than 20 years; we have seen many such cycles, and will see many more in the years to come. The real question is what happens once those surpluses are gone.
So what is the real challenge we should focus on?
The real challenge is for people to have access to energy that is reliable, affordable, clean and renewable. Planning for energy procurement is a political responsibility. And it is precisely in periods of electricity surpluses that governments must plan their energy requirements, not only because new capacity takes time to build, but also because that’s when they can afford to make important policy decisions and commitments that will have a lasting impact.
What kind of commitments should governments be making with respect to energy?
I’m not a climatologist, but witnessing the polar ice cap melt more and faster than ever tells me that the planet’s getting warmer. In 2013, carbon dioxide particles in the atmosphere reached a new record, exceeding 400 parts per million. Experts indicate that if these increase beyond 450 parts per million, the effects of climate change will become irreversible and dangerous. We are no longer making scientific suppositions. Climate change is real. Individuals, corporations, and governments have a duty to address this problem. Society must commit to replacing fossil energy, and governments’ role is to enact policies to this end.
Is this where you come in?
Renewable energy is part of the solution to climate change. Our energy produces no greenhouse gas emissions and its sources are inexhaustible.
But isn’t a shift to renewable energy going to cost more?
The cost of renewable energy is already competitive. For example, we can build a run-of-river hydro facility with a contract price of approximately $0.08 per kWh in Quebec, and approximately $0.10 per kWh in British Columbia, which is comparable to what it costs the public utilities. New wind energy can be supplied for approximately $0.09 per kWh in these markets.
Furthermore, unlike fossil energy, renewable energy costs can have an added benefit in that they are generally fixed for long periods of time – typically 20 to 40 years – through the use of long-term power purchase agreements. This provides public utilities, and ultimately consumers, with many years of protection against sudden or sharp increases in the price of electricity.
Globally, we have only just begun to harness the potential of renewable energy. Its cost should continue to decline as growing demand helps to reduce production costs through economies of scale and technological improvements. More importantly, its cost will become downright attractive when environmental and social externalities, such as the cost of pollution, are internalized
Moreover, anyone concerned about costs should think about the cost of doing nothing to address climate change.
So you are confident about the future of Innergex?
As a renewable energy producer, Innergex is part of the solution to climate change. We continuously invest human and financial capital in our portfolio of prospective projects because they are the future.