One advantage of renewable energy is that the cost of production is fixed by the infrastructure (and built-in maintenance) costs, rather than the case with fossil fuels where there's the uncertainty of the future cost of the fuel.

One local, to me, example, is that HydroQuebec just announced electricity rates would be frozen until 2012 at the earliest. This follows a period a few years ago where rates were also frozen for five years.

One could argue the merits or otherwise of this approach on stimulating demand reduction, but it's comforting to know that cost of production is not really a factor once the infrastructure is in place. I have read that some of the dams have production costs of around $0.01 per kWh.

Paul in Montreal.

It's v nice of them to volunteer to freeze/peg prices to actual production cost, but with oil/gas/electricity set to climb due to scarcity etc, how long can a growing price differential last? If substantial, then supply from HydroQuebec wd have to be rationed by decree rather than price, because everyone wd want it.

Same applies to all fuels, right down to cottage-industry log fuel. Prices of all are likely to rise, closely following the oil/gas/electricity price 'ceiling' - gd news for anyone owning woodland. The non-scarce ones need only maintain a slight price advantage, to steal share from the majors - there's no reason why anyone shd peg their prices down to actual production cost.

There will be no cheap fuels in the future - except solar heat that's collected and stored so lo-grade that it can't be transported or re-sold but only used v close to the point of collection, in which case it can hardly be classed as a fuel (which implies a price as a commodity, hence portability).

Touch of the Enron's maybe.
Paul, would industry not want to buy up the supply of is Quebec not into 'heavy' industries. not a part of Canada I know much about.

Posted By: Paul in MontrealMakes a lot of sense!

On the face of it it does but is that not similar to the UK cutting emission by 'exporting' our heavy industry to the East, it just shifts the problem to a different accounting centre rather than reduce anything. I really do feel the Enron's now.

I don't see how reducing consumption in an area where virtually all of the electricity is from renewable resources, then encouraging electricty intensive industry (with low transport elements) such as data centres to move there from high carbon electricty areas in order to use the freed up low carbon electricty capacity is anything like enron.

The alternative is to export that electricity instead, but that involves significant transmission losses using exiting gHVAC grids, and huge construction costs plus still 10% or so transmission losses is a HVDC long distance cable were installed.

hmm, but this isn't a carbon trading situation, it's a specific policy to free up low carbon electricity that's already being generated by reducing demand, and then use that freed up low carbon electricity to power energy intensive industry that is currently being powered by high carbon electricity.

this isn't enron style false accounting, and it's not carbon trading either.

Posted By: SteamyTeaI will be honest and do not understand enough of the relationship between Quebec and the USA and how they trade power, but seems to be that all will happen is that a US company will relocate to Canada and the 'dirty' US power will just be used somewhere else, possible 'dumped' on the market with no reduction in capacity at all.

Problem in the New England states of the US is that they are facing capacity problems but cannot build/expand their generating plants. Some utilities were even giving away CFLs some time ago to reduce demand such that the impossible-to-build new plants would be required. Importation is one solution for them and Quebec is actively looking to expand this market. As old coal-fired plants are taken out of service, they can replace that capacity with cheaper imported hydro electricity and get CO2 emissions reductions at the same time too. There are fewer and fewer heavy manufacturing companies anyway that would need electric power - the main ones being aluminium smelting and those plants are always located on their own hydro schemes anyway (or have special rates from HydroQuebec).

Posted By: Gavin_AI don't see how reducing consumption in an area where virtually all of the electricity is from renewable resources, then encouraging electricty intensive industry (with low transport elements) such as data centres to move there from high carbon electricty areas in order to use the freed up low carbon electricty capacity is anything like enron.

Exactly - data can be moved with lower losses than power as optical fibres are very "efficient" compared to power lines. Another advantage of moving datacentres to a cold climate is that the waste heat can actually be used, rather than, well, wasted. I can imagine a datacentre would fit nicely with a swimming pool complex or provide heat to offices or apartment buildings.

Paul in Montreal.