Former Hydro-Québec researcher charged with economic espionage seeks bail

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Wedged between farm fields and a highway on Montreal’s south shore near Varennes, Hydro-Québec’s Center of Excellence in Transportation Electrification and Energy Storage is, by many accounts, one of the province’s top research hubs. There, electrical engineers and chemists in white lab coats spend their days trying to unlock the keys to a revolution in battery technology.

But for the better part of its five-year existence, this low-rise, concrete slab of a building was also the site of a major breach of Canada’s industrial brain power, according to police. At the centre of it: a researcher named Yuesheng Wang, who police say gathered trade secrets for the benefit of China.

RCMP lays historic first charge of economic espionage against former Hydro-Québec researcher

Mr. Wang was arrested by the RCMP Monday and appeared in a Longueuil, Que., court by videolink Tuesday morning to schedule his bail hearing. He spoke through a Mandarin-English interpreter. He was being held in custody at the RCMP headquarters in Montreal before being transferred to a provincial detention centre to await the hearing.

Crown prosecutor Marc Cigana said he will oppose bail for Mr. Wang on the grounds that the suspect poses a flight risk. He is the first person charged in this country with economic espionage.

The Center of Excellence, or CETEES, is part of Hydro-Québec’s decades-old IREQ Research Institute, a 500-person-strong pool of scientists and technicians working on finding the best ways to improve the utility giant’s electricity systems. It was spun off as its own group in 2017 with the purpose of developing battery materials. The centre was led by internationally-renowned researcher Karim Zaghib until 2020, when he was replaced by current director Pierre-Luc Marcil.

Tucked away in the middle of a vast campus of IREQ facilities, the CETEES and its 120 employees are an inconspicuous bunch. Their work, though, is at the forefront of Quebec’s energy ambitions. In sum: to develop solutions to speed up the adoption of electric vehicles and find a good way to store the energy produced by renewables like wind and solar.

Quebec wants to be a leader in the world’s clean energy transformation, producing enough low-emissions hydroelectricity for its own people, business and transportation needs while selling the rest to its neighbours. The CETEES is one of the key innovation teams mandated to help it succeed, in part by commercializing Hydro-Québec’s technologies.

Although the centre does work on storage systems for power grids, much of its resources are currently directed at the transportation market, Hydro-Québec spokesperson Francis Labbé said. Adoption of electric and plug-in hybrid vehicles will really take off when high-performance batteries become available that are both affordable and safe, according to the utility. The centre is trying to develop technologies to make that happen.

The CETEES signed a partnership with Mercedes on bus batteries in 2020 that came to an end, and it’s now looking for an automaker or battery manufacturer to help it fine tune technology specifically for personal vehicles. Its intellectual property and leading-edge facilities are drawing interest “from around the world,” the centre says on its website. Among the four research partnerships it lists on the site, one is with the U.S. Army Research Laboratory.

Mr. Marcil told an interviewer with a Cogeco radio station last year that his team’s objective is to create a battery twice as powerful at half the cost of what’s currently on the market. “We’re not far from a solution” that can be commercialized, he said at the time, adding Hydro-Québec was racing against other research groups seeking to do the same.

Mr. Marcil is currently in Japan on business and not available for an interview, the spokesperson said. Mr. Zaghib did not return requests seeking comment.

The centre’s researchers are developing an ultra-thin lithium metal anode, which it calls the only one of its kind in the world. When perfected, the technology will go into solid-state lithium metal batteries, and deliver a high-energy density and good longevity with a light weight, according to Hydro-Québec. It’s also considered a safer alternative because it does not rely on flammable liquid electrolytes like the current generation of lithium-ion batteries.

The Center of Excellence findings are protected by some 2,000 patents in 27 countries, Hydro-Québec says. Mr. Wang’s name is attached to many of them. Public records show he holds several patents relating to the chemical compositions of battery materials.

RCMP Inspector David Beaudoin said Monday that Mr. Wang used Hydro-Québec’s trade secrets for China’s benefit. The accused used his position to conduct research for a Chinese university and other Chinese research centres, Insp. Beaudoin said. He also reportedly published scientific articles and submitted patents about this proprietary research with Chinese entities rather than with Hydro-Québec, the inspector said.

Mr. Wang, 35, is charged with obtaining trade secrets, fraud for obtaining trade secrets, breach of trust and unauthorized use of a computer. It is the first time that a suspect has been charged under a law against economic espionage passed by Parliament more than two decades ago.

He was represented in court by prominent Montreal criminal defence lawyer Gary Martin.

When Mr. Wang sought to accelerate the proceedings and have his bail decided on the spot, his lawyer sided with the judge in waiting until Friday to set a date, when more evidence will be available.

“Obviously, he’s a scientist, but he doesn’t have knowledge of judicial proceedings, so we’ll give him a chance, I’ll do my work of explaining to him how the judicial system works in Quebec,” Mr. Martin told reporters outside the courtroom.

Property records show Mr. Wang bought a house three years ago in the Montreal suburb of Candiac for $290,000. On Tuesday afternoon, there was a Ford SUV in the driveway and a stack of tires in the backyard, but no one home.

With a report from Colin Freeze