500 MW of projects for 300 MW targeted: a large-scale test for Hydro-Québec

Hydro Québec announced last week that it had received 60 bids totalling 481 MW for its first 300 MW solar call for tenders.

This is an important signal for the entire industry. But we must avoid two simplistic readings: neither minimizing the importance of this step nor concluding too quickly that a mature market is emerging.

Note: This text has been proofread by people in the industry before publication. Their comments validated its robustness and clarity. They may recognize themselves in this acknowledgement.

(LinkedIn: https://www.linkedin.com/pulse/500-mw-projects-300-targeted-large-scale-test-benoit-marcoux-yzgke/)

Solar formally enters the system

The first observation is institutional.

Solar photovoltaics is now formally entering Québec’s energy system as a recognized and organized component. It is no longer a marginal or experimental topic.

The submission of 60 projects, spread across 14 regions, with significant involvement from local and Indigenous communities, confirms that an ecosystem is beginning to emerge.

But this signal should not be mistaken for industrialization.

An emerging market: real competition, but still limited

The submissions total 481 MW for a 300 MW procurement. There is competition, but it remains moderate.

In mature markets, oversubscription is typically much higher, driven by developers capable of scaling and replicating projects.

Here, the market is still in a structuring phase.

Two characteristics stand out.

First, strong concentration. A few developers submitted full portfolios totalling tens of MW each. Natural Forces , Innergex and NUTRINOR COOPÉRATIVE stand out, with combined portfolios representing roughly two thirds of the targeted volume.

Second, a long tail of small projects. Most bidders submitted only one or two projects, often of limited size. Even structured players like BluEarth Renewables adopted a selective approach.

The local base is nonetheless strong: 13 of the 17 bidders are Québec-based, representing 28 projects and 286 MW. Several Canadian players created dedicated entities to operate in this context.

Indigenous participation is also notable, with a significant share of projects involving local communities.

Finally, the relative absence of large international developers is worth noting. Players such as EDF, Iberdrola , Enel Group or NextEra are not present. This may help explain the level of competition observed and appears consistent with certain features of the procurement design—particularly project size, structure, and requirements—which are less aligned with large-scale industrial deployment models.

In summary, the market exists and is responding, but it has not yet reached the depth and level of industrialization seen elsewhere.

A procurement approach that structures and constrains the market

The central issue lies in how Hydro-Québec structured this procurement.

Projects must be under 25 MW and connected to the distribution network. They must also meet strict timelines and rigorous requirements regarding local content, economic benefits, partnerships, and technical specifications.

This design serves legitimate objectives:

limiting impacts on the grid
ensuring social acceptability
maximizing local economic benefits

But it also has structuring and constraining effects.

It imposes a fragmented model, limits economies of scale, increases project complexity, restricts knowledge transfer from more mature markets, and introduces tight technical requirements that tend to increase costs.

In addition, there is a bias toward prequalified equipment. Hydro-Québec maintains a list of approved inverters. Deviating from this list requires additional validation (testing, lab reports, manufacturer requirements), increasing technical burden and timelines while reducing technological flexibility. In practice, this limits competition among equipment suppliers and may force developers to select more expensive or less optimized solutions, directly impacting project costs.

A model with incomplete information

A more subtle but critical issue concerns the availability of grid information.

In the current model, bidders move forward with partial information on grid capacity. Detailed integration studies are conducted only after submissions are filed.

In many ways, this resembles a game of “Battleship”: you pick a location, submit… and only later find out whether the site was viable.

This is not purely random. Developers rely on rules and empirical heuristics. But uncertainty remains significant.

By contrast, in Ontario, information on available distribution capacity—particularly on medium-voltage lines—is publicly available. Unlike the “Battleship” approach, this transparency is akin to playing with a map where target locations are partially visible before making a move: uncertainty is reduced upfront, and project allocation improves significantly.

The hidden cost: risk transfer

A significant portion of risk is transferred to developers:

permitting
interconnection
schedule compliance
grid integration uncertainty

This approach is coherent from Hydro-Québec’s perspective.

But it has a mechanical effect: developers incorporate these risks into their pricing.

To put it another way, when the utility lowers its own risk, it ultimately leads to higher overall project costs.

A more constrained financing environment

The questions submitted during the procurement process are revealing.

Many relate to revenue structure, contractual clauses, and compensation mechanisms.

These are typical indicators of financing concerns.

In this context:

cost of capital increases
risk buffers grow

Uncertainty around grid integration amplifies this effect: without ex ante visibility on capacity and integration costs, developers and lenders must incorporate an additional risk premium.

Result: part of this is reflected in the price per kWh.

A long process, reflecting structural constraints

Time is also a critical factor.

The process spans several years:

likely initiated after the 2035 Action Plan (2023)
accelerated following decree no. 1376–2024
procurement launched in 2025
bids submitted in 2026
decision expected in 2027
commissioning planned for 2029

In other words, roughly six years between initial policy direction and electricity production.

This timeline is long compared to more mature solar markets, but it reflects Québec’s institutional context:

regulatory requirements
grid coordination
social acceptability
structuring of an emerging market

In this context, the slower pace also reflects a deliberate choice for prudence.

That said, if the target of 3,000 MW of solar by 2035 is to be met, the pace will need to accelerate significantly. This will likely require concrete actions such as prequalifying interconnection points, publishing available grid capacity, standardizing contracts, increasing procurement sizes, and simplifying permitting processes.

A useful comparison: Ontario

The contrast with Ontario is instructive.

In April 2026, Ontario awarded contracts totalling 1,315 MW (solar and wind) at an average cost of approximately 8.8¢/kWh.

Several elements stand out:

much larger volumes
broader competition
a more developed ecosystem

While not a fully mature market, Ontario benefits from a more advanced industrial base from which Québec could draw lessons.

Two approaches emerge: a cautious and tightly structured model in Québec, and a more industrialized, scale-driven approach in Ontario focused on cost reduction.

These differences directly influence costs, timelines, and the ability to scale.