Procedure for obtaining connection authorization for projects with power ratings of 5 MW or more

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On February 15, 2023, Québec’s National Assembly adopted the Act mainly to cap the indexation rate for Hydro-Québec residential distribution rate prices and to further regulate the obligation to distribute electricity. Projects covered by this Act will now be required to obtain the authorization of the Minister of Economy, Innovation and Energy before they may be connected by Hydro-Québec or by another holder of an exclusive right to distribute electricity.

• New projects with power ratings of 5 MW or more for which an agreement setting out a financial commitment was not entered into with Hydro-Québec or with another holder of an exclusive right to distribute electricity prior to December 2, 2022.
• Additional load projects with power ratings of 5 MW or more for which an agreement setting out a financial commitment was not entered into with Hydro-Québec or with another holder of an exclusive right to distribute electricity prior to December 2, 2022.

Projects submitted as of March 31, 2023

The Ministère de l'Économie, de l'Innovation et de l'Énergie (MEIE) has analyzed all projects submitted as of March 31, 2023, in accordance with the stated criteria. Decisions concerning energy block allocations for these projects were issued in August 2023. The first batch of projects analyzed are detailed below:

• 35 projects were submitted, for a total of 24,094 MW, in the industrial sector and the emerging sectors;
• 14 projects where the distributor of electricity did not have the technical capacities to make the interconnection;
• 10 projects refused following a full multi-criteria analysis for a total of 1,715 MW;
• 11 projects authorized following a full multi-criteria analysis for a total of 956 MW.

The following companies received authorizations in connection with the first batch of projects submitted:

Projects submitted between April 1 and June 30, 2023

In June 2024, the Québec government selected 11 projects from among the applications submitted between April 1 and June 30, 2023, whose connection is subject to the conclusion of an agreement between Hydro-Québec and the promoters. The businesses whose projects were selected are indicated below.

Moreover, as at May 28, 2024, roughly 364 MW were authorized for public interest projects requiring 5 MW and more (e.g., for hospitals, residential project development and public transportation).

Hydro-Québec will contact the representatives of the selected projects without delay to determine the specific network connection parameters and conditions. In addition, all approved projects will be subject to an energy optimization analysis (energy efficiency and peak management).

Depending on the connection options, other promising projects from the standpoint of Québec’s energy transition and economic development could be added to the list.

Analysis is ongoing of completed application forms submitted after June 30, 2023.

To obtain the authorization request form, please contact your designated commercial delegate at Hydro-Québec or visit the Hydro-Québec website to download the form.

If your service is provided by another electricity distributor, please contact that distributor directly.

Projects requiring ministerial authorization will be subject to the process outlined below.

Stage 1 –Authorization request form

You are required to fill out the authorization request form and to submit it to Hydro-Québec or to your electricity distributor (if other than Hydro-Québec). The information provided by project developers must be as complete and as precise as possible in response to the questions on the form. Incomplete forms will not be accepted. Developers may also attach other relevant documents to their applications.

Stage 2 – Summary analysis of network technical capacity

Projects will be subject to a summary analysis primarily based on the criterion of the distributor’s technical capacity to connect projects, in accordance with the electrical network’s capacity and the requested specifications (location, number of MW required, service start date and load increase). The Minister may refuse to grant an authorization at this stage.

Stage 3 – Costs and connection timelines

At this stage, Hydro-Québec or the relevant distributor may carry out a summary evaluation of the costs and the connection timelines for submission to the developer. The developer will then be required to provide written confirmation of its interest (or lack of interest) in pursuing the application for its project.

Confirmation that Stages 2 and 3 have been successfully completed does not mean that the request has been or will be authorized by the Minister; no guarantees can be provided in this regard.

Stage 4 – Multi-criteria analysis

This stage consists of carrying out a detailed analysis of the project taking into account the criteria listed below. These criteria are evaluated in light of the responses provided by the applicant. Given the tight electricity balance (supply/demand), the government is seeking to maximize the economic, social and environmental benefits of the available MW for all projects requiring 5 MW or more. The projects undergo a comparative analysis to select those with the greatest potential for Québec society, i.e., projects maximizing benefits (criteria below) due to optimized demand in electricity.

Developers, therefore, must ensure that their MW demand is optimized to the greatest possible extent, taking into consideration the following factors:

• An overall energy assessment designed to ensure optimal energy management;
• Energy efficiency measures and high-performance equipment designed to achieve the project’s objectives with lowest possible energy consumption;
• The possibility of an optimized energy mix (using other energy sources such as biomass, bioenergy or self-generated electricity);
• Recovery of waste heat (heat recovery);
• The most accurate estimate possible of MW demand.

This criterion seeks to examine the project’s impact on Québec’s electrical network, in particular by taking into consideration the distributor’s technical capacity to provide and deliver the required electricity to the specified locations within the specified timeframes, in accordance with the network’s capacities. The project’s characteristics are then analyzed taking into account the project’s efficiency for the electrical network, e.g. power interruptibility during winter peak periods, the load factor and an assessment of the project’s impact on the specified host region.

Developers must undertake to join Hydro-Québec’s power demand management program. Ideally, the submitted projects should aim to be “power-interruptible” to the greatest possible extent during winter peak periods, either via temporary suspensions of operations or through reliance on alternative energy sources or storage solutions.

This criterion seeks to evaluate the project’s costs and economic/financial benefits for the government and for Québec society. Among other things, the relevant considerations include impacts on Hydro-Québec’s profitability, fiscal benefits and contributions to Québec’s GDP. In particular, these factors are measured in terms of:

• The company’s investments and expenditures in Québec, including operating expenditures, capital investment expenditures and maintenance capital expenditures;
• The project’s electricity supply costs.

In particular, projects must detail expenditures made directly in Québec in terms of investments, operations and maintenance capital, as well as by category:

• Number of jobs and wage levels;
• Expenditures involving infrastructure, equipment, services, inputs, etc.

The number of MW requested is a key factor in selecting projects as the analysis will focus on maximizing the economic benefits from the requested MW.

This criterion will evaluate the repercussions of the project on greenhouse gas (GHG) emission targets set by the Government of Québec and its contribution to the decarbonization of Québec. Proponents must present the effects of their project in terms of emissions and/or GHG emission reductions and provide details of their calculations. The number of MW requested is a key factor in selecting projects as the analysis will focus on maximizing the environmental benefits from the requested MW. For this criterion, projects that can reduce GHG in Québec are favoured.

For example, in the case of bioenergy or hydrogen producers, projects will be evaluated based on, among others, their effect on the decarbonization of Québec, particularly in respect to:

• level of production flow into priority sectors;
• anticipated GHG reductions;
• level of certainty linked to local consumption.

For more details on requirements for green hydrogen projects and their by-products as an energy vector, proponents may refer to the detailed criteria (in French only).

In particular, this criterion seeks to analyze the project’s social acceptability in terms of the host community, structural impacts and ESG standards.¹

When assessing the level of social acceptability, developers must outline the steps taken and the support received within the host community.

When assessing structural impacts, developers must outline how these impacts are integrated within the Québec value chain and how they are aligned with local suppliers.

As regards ESG standards, developers must outline their commitments and related measures.

This criterion is intended to measure the effects of the project on regional development, specifically taking into account its contribution to jobs and wage growth in the region for which the project is planned (employment rate, average salary, etc.).

This criterion seeks to analyze the project in terms of its alignment with government objectives and strategies.

• Projects facilitating the achievement of the objectives pursued by various government strategies will be prioritized. Examples of these strategies are provided below, in alphabetical order (this list is not exhaustive and is not ranked in terms of priority level).
  • 2030 Plan for a Green Economy
  • 2020-2025 Québec Plan for the Development of Critical and Strategic Minerals
  • 2018-2025 Biofood Policy
  • 2030 Sustainable Mobility Policy
  • 2020-2025 Québec Greenhouse Growth Strategy
  • Québec Battery Sector Development of Strategy
  • 2021-2024 Québec Aluminum Development Strategy
  • Québec Green Hydrogen and Bioenergy Strategy

• If the decision is favourable, the developer may proceed with the next connection stages with its electricity distributor.
• If the decision unfavourable, the developer will have the option of adjusting the project and submitting a new application.

Projects deemed to be public services, e.g. that tie in with the health care or education networks or with public transportation will be subject to a separate process.

In the case of exclusively residential or commercial development projects, the 5 MW threshold will take into account the end consumers’ consumption patterns, i.e. consumers who have entered into an agreement with the electricity distributor.

For further information, please contact your designated commercial delegate at Hydro-Québec or visit Hydro-Québec’s website to download the authorization request form.

If your service is provided by another electricity distributor, please contact that distributor directly.

Consult the press releases: Une première sélection de projets industriels de plus de 5 MW – Une attribution responsable et durable de notre électricité (French only).

1. Environmental, social and governance standards.