Hydro-Québec, Canada's biggest electricity utility, wants to expand power sales to U.S. Northeast states hungry for green energy to meet climate change goals.
The power supplier can generate as many as 3,000 additional megawatts that could be shipped south of the border without having to build a new dam, Chief Executive Officer Eric Martel said in an interview at Bloomberg headquarters in New York. It has an annual generating capacity of about 37,000 megawatts.
"We can probably already commit to 3,000 megawatts without building anything other than the transmission line," Martel said Tuesday. "Today we are limited by the number of transmission lines."
Martel wants to double revenue by 2030, targeting takeovers in the Americas and Europe while increasing sales of hydro-generated power to the U.S. Hydro-Québec hopes to win long-term contracts from states like Massachusetts and New York that want to lower emissions of heat-trapping carbon dioxide.
"The states we are working with, mainly New England and New York, are really engaged in reducing emissions. They have their own targets."
Power sales outside Quebec generated $1.7-billion ($1.3-billion U.S.) of revenue last year, representing about 13 per cent of the company's sales. Three lines in the planning process– the Champlain Hudson Power Express, the New England Clean Power Link, and Northern Pass – could allow the provincially owned utility to boost exports south.
"Those three projects are about the same size, about 1,000 megawatts of power each, and we could participate in all three," Martel said in the interview. "We would be comfortable doing that if we got a long-term commitment."
With most exports currently sold at spot rates, Hydro-Québec would prefer to sign long-term, fixed-rate contracts for the additional power, Martel said. Agreements could last as long as 40 years, he added.
"There is interest on our side and from our customers to have longer-term contracts with stability on pricing," he said. "That's one thing that we are working on for the future."
Hydro-Québec had net income of about $2.2-billion on revenue of about $9.9-billion in the first nine months of 2016. More than 99 per cent of the power that the provincial-owned utility generates comes from renewable sources, according to the company's 2015 annual report.
By 2030, power exports and acquisitions could propel annual revenue to about $27-billion, with annual profit of about $5.2-billion, Martel said Tuesday.