Tripling the capacity of our LSR plant to meet growing demand
To tap into the market potential for liquefied natural gas (LNG), Gaz Métro announced, in partnership with Investissement Québec, its plan to boost liquefaction capacity at its liquefaction, storage and regasification (LSR) plant, in September 2014. The project will triple the plant’s production capacity to 9 Bcf. The work got under way in June 2015 and should be completed in the fall of 2016.
to gain ground
Two years ago, people were saying that the LNG revolution was a bit like the cellphone revolution. In 2015, this still holds true, as liquefied natural gas is growing steadily in popularity.
LNG means that natural gas is now accessible in regions that, due to their remoteness from the gas distribution network, normally rely on petroleum products. LNG thus has a positive impact on regional prosperity. It allows companies to stay competitive and can be a decisive factor for attracting new players. It is also the most economical and environmentally friendly fuel for freight transport by truck and ship.
Société des Traversiers du Québec launches its first LNG ferry
Convinced of the environmental and economic advantages of LNG, the Société des traversiers du Québec (STQ) ordered its first three LNG-powered ferries. In July 2015, the F.-A.-Gauthier, North America’s very first LNG ferry, was officially put into service. It currently replaces the Camille-Marcoux between Matane and Baie‑Comeau and will eventually serve the Baie-Comeau/Godbout crossing.
STQ’s choice of LNG to power its three new ferries is a milestone for Quebec’s maritime transportation sector and paves the way for other ship-owners. The other two ferries will link Tadoussac with Baie‑Sainte‑Catherine. They are scheduled to come into service in 2016.
Way of the future for the maritime industry
LNG is a cost-effective and environmentally friendly solution that, among other things, allows ship-owners to meet increasingly stringent standards for pollutant emissions on North American waterways. Since January 1, 2015, the sulphur standard for marine fuels used on the Great Lakes and St. Lawrence River (the North American Emission Control Area) has been reduced from 1% to 0.1%.1.
The use of LNG enables greenhouse gas emission reductions of up to 25% compared with marine diesel, and almost totally eliminates emissions of fine particles and other air pollutants. LNG engines are also quieter and produce fewer vibrations, resulting in greater respect for marine life.
1in compliance with a decision by the international maritime organization, sulphur oxide emissions from ships in emission control areas must be reduced effective january 1, 2015.
Meeting peak needs at the Transcanada Energy Power Plant
In the spring of 2015, Gaz Métro announced the signing of an agreement with Hydro-Québec Distribution to supply the TransCanada Energy (TCE) power plant in Bécancour with LNG. Gaz Métro is still negotiating the overall scope of the project, which will enable the TCE plant to meet Hydro-Québec’s peak power needs. The project has been approved by the Régie de l’énergie but is still conditional on the issuing of an authorization certificate by the Ministère du Développement durable, de l’Environnement et de la Lutte contre les changements climatiques (MDDELCC).
Meeting Northeastern U.S. Energy needs
Even though the United States is one of the world’s largest natural gas producers, several northeastern states are grappling with natural gas supply issues.
With its LNG distribution-by-truck solutions, Gaz Métro meets peak and storage needs in New England (Maine, Vermont, Massachusetts, Connecticut and Rhode Island).
Natural gas for vehicles: A proven solution
Less expensive and more environmentally friendly than diesel, natural gas has a major potential in the transportation sector.
Natural gas for vehicles (NGV) is a particularly promising option for fleets of waste-collection trucks. It has proven to be an efficient solution for waste-collection companies like Sani-Estrie, EBI, BFI, Gaudreau Environnement and ABC Environnement, multifunction vehicles such as those of the City of Saint-Hyacinthe and Gaz Métro, and heavy-transport vehicle fleets such as the ones operated by Groupe Robert and Canadian American Transportation (C.A.T.).
An attractive solution in more ways than one
In Quebec, landfill operations account for about 5.5%2 of total greenhouse gas (GHG) emissions. Quebec municipalities have to make important decisions in order to comply with the Quebec Policy on Residual Materials3, which will prohibit the disposal of residual organic matter starting in 2022.
Using organic matter to produce biomethane, a renewable natural gas, avoids major GHG emissions to the atmosphere and, at the same time, ensures optimum management of this matter. By replacing petroleum products with biomethane, we can reduce the related GHG emissions by more than 99.4% and reduce fine particles by close to 99%.
Biomethane projects are thus aimed at using residual materials to meet Quebec’s energy needs. Gaz Métro wants to supply its customers with renewable, locally produced natural gas.
2Source: Ministère du Développement durable de l’Environnement et de la Lutte contre les changements climatiques (MDDELCC), Inventaire québécois des émissions de gaz à effet de serre en 2012 et leur évolution depuis 1990, Table 1, “Émissions de GES au Québec en 1990 et 2012,” p. 11.
Saint-Hyacinthe biomethane plant
Following a decision rendered by the Régie de l’énergie, Gaz Métro can now inject biomethane into its network. The decision authorizes Gaz Métro to buy biomethane produced by the city of Saint-Hyacinthe and proceed with a connection project aimed at integrating the biomethane into its network. When the connection project is complete, up to 13 million cubic metres of biomethane per year produced by Saint-Hyacinthe will be injected into the Gaz Métro network, providing all Quebec natural gas consumers with access to a locally produced, clean and renewable form of energy.
Under the agreement in force, injection of biomethane into Gaz Métro’s distribution network is scheduled to begin in 2017 and will continue for 20 years. Saint-Hyacinthe is the first municipality to use biomethanation to derive value from organic matter, and to use the resulting biomethane to meet its energy needs.
Natural gas supply
Extending the network
in the Bellechasse
In June 2015, Gaz Métro and the governments of Quebec and Canada announced a project aimed at extending the natural gas network in the Bellechase region, between the municipalities of Lévis and Sainte-Claire, over a distance of 71 kilometres.
The project has taken shape thanks to support from the business community and elected municipal officials, as well as the governments’ commitment to undertake a tangible initiative with a positive impact on the prosperity of businesses, merchants and public institutions.
The federal and Quebec governments have agreed to a joint investment of $33 million for the project, estimated to cost $40 million. Gaz Métro will invest $7 million.
The project was approved by the Régie de l’énergie in December 2015 and planning is progressing. Work will get under way in 2016, and natural gas should be available in December of the same year.
Energy East: An agreement that protects our customers
Gaz Métro has consistently argued that deployment of the Energy East oil pipeline project must not be to the detriment of current and future natural gas consumers. In August 2015, following months of discussions, Gaz Métro and its Ontario counterparts, Union Gas and Enbridge Gas, announced that they had reached an agreement with TransCanada PipeLines Limited (TCPL), under which natural gas supplies for consumers in Quebec and Ontario would be protected.
Among other things, the agreement guarantees firm transportation capacity for Quebec’s current gas supply, in addition to providing capacity in excess of 50,000 gigajoules per day. If the Energy East project goes ahead, the agreement could mean a benefit valued at $100 million between now and 2050 for natural gas consumers. In short, the agreement ensures that natural gas consumers will not have to pay the bill for development and construction of the oil pipeline project.
Gaz Métro is pleased with this outcome. We stayed the course, defending the same guiding principle from the very start, namely full protection of our customers’ interests.
Our Vermont subsidiaries
Green Mountain Power (GMP)
Operational integration of GMP and CVPS: Synergies exceed expectations
Further to the acquisition of Central Vermont Public Service Corporation (CVPS) in 2012, Green Mountain Power (GMP) adopted a three-year plan aimed at merging the two entities’ operational processes. The year 2015 brought this successful operational integration plan to a close, and the ensuing synergies have exceeded those initially forecast for 2015,2014 and 2013.
Thanks to lower operating costs, GMP was able to return US$8 million to its customers and keep the remainder generated by efficiency gains, in compliance with the agreement reached with the Vermont Public Service Board (VPSB) during the acquisition of CVPS.
In fiscal 2016, synergy savings will be shared equally by GMP and its customers. GMP’s 2016 rate case therefore includes US$13.2 million attributable to efficiency gains to be returned to customers.
Sunshine powers 2,000 homes
In March 2015, GMP completed a solar power generation and storage project, the Stafford Hill Solar Farm, located in Rutland, Vermont, for which it received the 2015 Project of Distinction Award from the Solar Energy Industries Association and the Solar Electric Power Association.
Consisting of 7,700 solar panels, the farm can generate 2.5 megawatts of electricity and power up to 2,000 homes at full sunlight and 365 homes year-round.
The project also has a storage component whereby 3.4 megawatthours can be stored in a battery system. This energy can then be used during peak periods and serve as back-up power for an emergency shelter in the event of a crisis situation affecting the electrical grid.
With projects generating the most solar power per capita in the region, Rutland has become the solar capital of New England and a model of economic development and revitalization through energy innovation.
Tesla Motors partnership for a solar-charged battery
In summer of 2015, GMP entered into a partnership with Tesla Motors Inc. in order to offer customers the possibility to use Powerwall, a home battery that charges using electricity generated from solar panels.
GMP is the first energy service company in the United States to conclude such a partnership. With this system, GMP customers benefit from a back-up energy source and GMP can better manage energy demand during peak periods.
Cow power to generate clean electricity
GMP continued to develop its cow power program in 2015, in partnership with dairy farms. The program uses digesters to process cow manure into biogas, which is then used to generate renewable electricity.
This program is of great benefit to the entire State of Vermont, since, in addition to generating renewable energy, it also improves water quality by reducing the amount of phosphorus running off into lakes and streams in the Champlain Lake area — a constant challenge for the region. The system could also be used to process food waste, which will no longer be allowed in Vermont landfills following recent legislative changes. Currently, 13 farms are taking part in the project.
Vermont Gas System (VGS)
Supplying southern Vermont with natural gas
In 2014, after obtaining the necessary permits, Vermont Gas System (VGS) began construction on Phase I of its network development project, which consists of extending its natural gas distribution system to serve the communities of Vergennes and Middlebury in Addison County. The project will double the size of VGS’s current assets.
VGS expects to complete construction of the first 17 kilometers of Phase I (out of a total of 66 kilometres) by the end of December 2015. The majority of the construction work is expected to be done during fiscal 2016.
In recent months, further to a project cost update, the Vermont Public Service Board (VPBS) had certain questions. In October, VGS announced a memorandum of understanding with the VPBS regarding recognition of the extension project costs. The memorandum is subject to a reconfirmation of the CPG by the VPSB. If it is approved, it will ensure the continuation of this promising project.
At the time of writing, the project remains underway and is still seen as a beneficial initiative for Vermont. In addition to its environmental advantages, natural gas remains a competitive energy source compared with other fuels.
Participation in preparation of a new Quebec energy policy
In November 2014, the Government of Quebec announced its approach for preparing a new Quebec energy policy. From February to June 2015, public consultations were held by the Ministère de l’Énergie et des Ressources naturelles (MERN). Gaz Métro took part in four forums, filing a brief each time, and was invited once as an expert witness. During each of these forums, we illustrated how our solutions could have a tangible and positive impact on Quebec’s energy future.
… and other promising initiatives
Gaz Métro also participated actively in the revision of the government’s green paper and took part in public hearings held by the government with a view to setting Quebec’s greenhouse gas emissions reduction target for 2030. In addition, it played an active role in a consultation aimed at defining the concept of “social acceptability”.
Ready for Next?
Active involvement for a diversified energy future
In September 2015, Gaz Métro invited all Quebecers take part in a collective reflection on our energy future, with an advertising campaign dubbed “Ready for Next?”. Featuring our employees, who shared their ideas and vision, the campaign was a call for citizens to combat climate change by joining forces to develop Quebec’s energy future, in three ways:
- By encouraging people to consume energy responsibly;
- By favouring the development of renewable forms of energy such as wind power, solar power and biomethane;
- By reducing our dependence on petroleum products, among other ways by replacing them with natural gas.
Gaz Métro took advantage of the campaign to highlight the new renewable energy sources that it is developing in Quebec and Vermont via its subsidiary Green Mountain Power.