The government of Ontario and Quebec in Canada have agreed to work towards a new 600 MW trade agreement between Ontario’s Independent Electricity System Operator (IESO) and Hydro-Québec that will optimize the use of existing electricity generation capacity in both provinces. Under this preliminary deal, the IESO and Hydro-Québec will carry out an annual capacity swap of 600 MW. The IESO will provide 600 MW to Hydro-Québec in the winter and Hydro-Québec will provide 600 MW to the IESO in the summer. Ontario will also have the opportunity to bank any amount of the 600 MW of summer capacity provided each year for use in any future summer period during the agreement, allowing the province to save capacity until it is required.
This electricity trade agreement is possible because Ontario and Quebec have complementary seasonal peaks in electricity demand. Ontario’s peak demand occurs in the summer, driven mainly by air conditioning on hot days, and Quebec’s peak demand occurs in the winter, driven mainly by electric heating on cold days. As a result, both provinces have excess capacity during the other province’s electricity peak period that can be exchanged to reduce the need for new generation capacity. There are currently six interties between the Ontario and Québec transmission systems. The current interties between Québec and Ontario have a total combined capacity of approximately 2,775 MW. Under the current Ontario-Quebec electricity trade agreement, the IESO can call on 500 MW of capacity from Quebec up until 2030. Ontario will maintain this option under the new agreement.