Category Archives: Innovation

Innovation in Napoleonic France and Industrial Revolution Britain: Lessons for Canada and Québec in Energy

What can Canada and Québec learn from history to drive energy innovation today?

(LinkedIn: https://www.linkedin.com/pulse/innovation-napoleonic-france-industrial-revolution-britain-marcoux-no3ie)

Napoleonic France emphasized centralized scientific progress, while Industrial Revolution Britain thrived on market-driven experimentation and private-sector collaboration. The result? Britain rapidly adopted innovations like steam power, while France, despite breakthroughs, struggled with scalability and commercialization.

Fast forward to today—Canada faces a similar crossroads. While state-driven initiatives in clean energy have driven remarkable progress, ensuring that these innovations transition from research labs to large-scale adoption remains a challenge.

?? Should Canada focus more on private-sector incentives to accelerate commercialization? ?? What lessons from history can help balance government-led research with entrepreneurial agility?

The answers lie in a strategic blend of historical lessons, modern policies, and bold action. Read on to discover how Canada and Québec can build an energy ecosystem that scales innovation and strengthens national energy security.

I. Comparing the Two Innovation Models in Energy

While both Napoleonic France and Industrial Revolution Britain played crucial roles in energy innovation, their approaches differed significantly. France’s state-led model focused on controlled scientific advancements, while Britain’s decentralized market-driven approach encouraged rapid adoption. The table below highlights key contrasts between the two models:

This contrast demonstrates that while state-led research can produce major breakthroughs, sustained technological progress often depends on decentralized innovation networks, private investment, and market-driven incentives. In Britain, organizations such as the Lunar Society (which included inventors like James Watt and Matthew Boulton) and the Royal Society provided crucial platforms for knowledge exchange and collaboration. These informal networks allowed inventors to refine ideas and accelerate practical applications, fostering a dynamic innovation ecosystem.

In contrast, France relied on formal institutions like the Académie des Sciences and the École Polytechnique, which focused on state-led scientific progress. While these institutions ensured a high level of theoretical knowledge and systematic research, the centralized control limited the commercial scalability of innovations. Canada and Québec must find a balance between these models to successfully scale clean energy technologies in today’s geopolitical landscape.

II. Invention vs. Adoption in Energy

Case Study: Innovation in Steam Power

France contributed foundational research in energy innovation. Sadi Carnot (1824) developed thermodynamic theory, laying the foundation for modern heat engines. However, France’s lack of industrial ecosystems prevented immediate practical applications.

Before then, James Watt’s steam engine (1769) had revolutionized British industry, allowing for mass production in textiles, mining, and railways. Britain’s private investment networks and industrial-scale coal extraction fuelled rapid adoption. Additionally, British inventors frequently engaged in tinkering and trial-and-error experimentation, often producing early prototypes without a deep theoretical foundation. The Lunar Society facilitated discussions that helped bridge the gap between scientific theory and practical industrial applications.

Implications for Canada and Québec

Québec, with its strong hydroelectric sector, mirrors France’s state-led model, where major energy projects are government-controlled. For new clean energy technologies (e.g. green hydrogen, battery storage), Canada must enable private-sector investment to scale adoption beyond state-supported projects. Encouraging experimental innovation hubs and public laboratories where companies can test and refine early-stage clean energy solutions could accelerate commercialization. Given current economic and geopolitical pressures, including U.S. annexation threats, Canada must ensure energy independence and strategic resource control to avoid economic vulnerability. Fostering a Canada-wide energy ecosystem and encouraging energy entrepreneurs to collaborate across provinces is critical, especially now, as collaboration with U.S. firms will be more difficult.

III. Challenges in Adoption: Comparing France, Britain, and Canada/Québec

1. Centralized Control Slows Commercialization

Napoleonic France’s highly structured approach to scientific progress meant that while significant breakthroughs were made, they were often constrained by bureaucratic control. Scientists and engineers worked on government mandates, and private-sector incentives were minimal. This created an environment where technological advancements were slow to reach industrial applications.

Meanwhile, Britain’s market-driven model encouraged widespread industrial adoption, fuelled by private investment and strong patent protections. Inventors had the freedom to develop, refine, and commercialize their work, leading to rapid advancements in energy technology.

Similarly, Canada today faces challenges in bridging the gap between government-supported research and large-scale industrial adoption. While public R&D investments have driven advancements in renewable energy, bureaucratic barriers, especially between provinces, and regulatory constraints have slowed down commercialization. Canada and Québec must ensure that clean energy innovations do not stagnate in research institutions but instead transition into widespread market use.

2. Energy Innovation Needs Market Adoption

Napoleonic France saw many groundbreaking scientific discoveries, yet these innovations often remained confined to academic or military applications rather than being widely implemented in the economy.

Britain’s decentralized, private-sector-driven model allowed for rapid adoption of technological advancements, particularly in the energy sector.

Canada faces similar challenges today—while it has strengths in energy innovation (e.g. hydroelectric power, carbon capture, and battery technology), adoption remains limited due to regulatory constraints and a lack of private-sector incentives.

To fully realize the potential of clean energy technologies, Canada must align market forces with innovation incentives, ensuring that breakthroughs transition into widespread industrial and consumer use.

Encouraging domestic adoption of clean technologies will reduce reliance on external markets, making Canada more resilient in the face of geopolitical instability.

IV. Strategic Priorities for Canada and Québec in Energy

The lessons from France and Britain’s historical approaches to innovation offer valuable guidance for Canada and Québec’s energy future. A successful energy transition requires a strategic balance between government support and industrial policies and private-sector dynamism. Policies should foster investment, streamline market adoption, and prioritize energy sovereignty to ensure long-term resilience.

1. Encourage Private Investment in Clean Energy — Government-backed research should actively partner with industry to ensure commercial-scale adoption. Canada must prioritize energy independence in response to U.S. trade aggression.

2. Ensure Resilience in Energy Supply Chains — Trade conflicts highlight the need for electrical equipment, domestic battery and clean energy technology production.

3. Decentralized Innovation Clusters Are More Effective Than Bureaucratic Control — Canada and Québec should strengthen regional energy innovation clusters while ensuring national coordination. Although clusters may focus on specific technologies, a cohesive strategy will maximize innovation, resource-sharing, and energy security.

4. Energy Sovereignty Must Be a National Priority — Given geopolitical threats, Canada must protect strategic energy assets and infrastructure from foreign control.

Conclusion: Canada’s Path Forward in Energy Innovation

The contrast between France’s structured scientific advancements and Britain’s hands-on, market-driven tinkering highlights key lessons for Canada and Québec today. By leveraging state-led research while fostering private-sector commercialization, Canada can establish a strong, resilient clean energy sector that ensures long-term economic stability and energy security.

L’innovation en France napoléonienne et en Grande-Bretagne industrielle : Leçons pour le Canada et le Québec en matière d’énergie

Que peuvent apprendre le Canada et le Québec de l’histoire pour stimuler l’innovation énergétique aujourd’hui??

(LinkedIn : https://www.linkedin.com/pulse/linnovation-en-france-napoléonienne-et-industrielle-leçons-marcoux-ojdue/)

La France napoléonienne a mis l’accent sur les progrès scientifiques centralisés, tandis que la Grande-Bretagne industrielle a prospéré grâce à l’expérimentation axée sur le marché et à la collaboration avec le secteur privé. Résultat?? La Grande-Bretagne a rapidement adopté des innovations comme la machine à vapeur, tandis que la France, malgré des avancées, a eu du mal avec la mise à l’échelle et la commercialisation.

Aujourd’hui, le Canada est à un carrefour similaire. Alors que les initiatives étatiques en matière d’énergie propre ont permis des progrès remarquables, garantir que ces innovations passent des laboratoires de recherche à une adoption à grande échelle reste un défi.

?? Le Canada devrait-il se concentrer davantage sur les incitations au secteur privé pour accélérer la commercialisation?? ?? Quelles leçons de l’histoire peuvent aider à équilibrer la recherche dirigée par le gouvernement et l’agilité entrepreneuriale??

Les réponses résident dans un mélange stratégique de leçons historiques, de politiques modernes et d’actions audacieuses. Découvrez comment le Canada et le Québec peuvent bâtir un écosystème énergétique qui favorise l’innovation et renforce la sécurité énergétique nationale.

I. Comparaison des deux modèles d’innovation énergétique

Bien que la France napoléonienne et la Grande-Bretagne de la révolution industrielle aient toutes deux joué un rôle crucial dans l’innovation énergétique, leurs approches différaient considérablement. Le modèle dirigé par l’État en France était axé sur des avancées scientifiques contrôlées, tandis que l’approche décentralisée et axée sur le marché de la Grande-Bretagne encourageait une adoption rapide. Le tableau ci-dessous met en évidence les principales différences entre ces deux modèles :

Ce contraste montre que si la recherche dirigée par l’État peut générer des percées majeures, le progrès technologique durable repose souvent sur des réseaux d’innovation décentralisés, des investissements privés et des incitations axées sur le marché. En Grande-Bretagne, des organisations comme la Lunar Society (qui comprenait des inventeurs comme James Watt et Matthew Boulton) et la Royal Society ont offert des plateformes essentielles pour l’échange de connaissances et la collaboration. Ces réseaux informels ont permis aux inventeurs de perfectionner leurs idées et d’accélérer les applications pratiques, favorisant ainsi un écosystème d’innovation dynamique.

En revanche, la France s’appuyait sur des institutions formelles, comme l’Académie des Sciences et l’École Polytechnique, axées sur les progrès scientifiques dirigés par l’État. Bien que ces institutions aient garanti un haut niveau de connaissances théoriques et de recherche systématique, le contrôle centralisé limitait la commercialisation des innovations. Le Canada et le Québec doivent trouver un équilibre entre ces modèles pour développer efficacement les technologies d’énergie propre dans le contexte géopolitique actuel.

II. Invention vs adoption en énergie

Étude de cas : Innovation dans la vapeur

La France a contribué à la recherche fondamentale en innovation énergétique. Sadi Carnot (1824) a développé la théorie de la thermodynamique, posant ainsi les bases des moteurs thermiques modernes. Cependant, l’absence d’un écosystème industriel a empêché des applications pratiques immédiates.

Auparavant, la machine à vapeur de James Watt (1769) avait révolutionné l’industrie britannique, permettant la production de masse dans le textile, l’exploitation minière et les chemins de fer. Les réseaux d’investissement privés et l’extraction massive de charbon en Grande-Bretagne ont favorisé une adoption rapide. De plus, les inventeurs britanniques pratiquaient fréquemment l’expérimentation et les ajustements progressifs, souvent en produisant des prototypes sans base théorique approfondie. La Lunar Society a facilité les discussions permettant de combler l’écart entre la théorie scientifique et les applications industrielles.

Implications pour le Canada et le Québec

Le Québec, avec son secteur hydroélectrique dominant, reflète le modèle dirigé par l’État de la France, où les grands projets énergétiques sont sous contrôle gouvernemental. Pour les nouvelles technologies d’énergie propre (ex. hydrogène vert, stockage d’énergie), le Canada doit favoriser les investissements privés pour accélérer l’adoption au-delà des projets soutenus par l’État. Encourager des centres d’innovation expérimentale et des laboratoires publics où les entreprises peuvent tester et affiner des solutions énergétiques en phase initiale pourrait accélérer la commercialisation.

III. Défis d’adoption : comparaison entre la France, la Grande-Bretagne et le Canada/Québec

1. Le contrôle centralisé ralentit la commercialisation

La France napoléonienne a adopté une approche hautement structurée du progrès scientifique, ce qui a conduit à des avancées majeures, mais souvent limitées par un contrôle bureaucratique strict. Les scientifiques et ingénieurs travaillaient sous mandats gouvernementaux, et les incitations du secteur privé étaient limitées. Résultat : les avancées technologiques mettaient du temps à être appliquées industriellement.

En revanche, le modèle britannique axé sur le marché a favorisé une adoption industrielle rapide, soutenue par l’investissement privé et des protections de brevets solides. Les inventeurs avaient la liberté de développer, affiner et commercialiser leurs innovations, entraînant ainsi des progrès énergétiques rapides.

De la même manière, le Canada fait aujourd’hui face à un défi similaire, devant combler le fossé entre la recherche financée par l’État et l’adoption industrielle à grande échelle. Malgré des investissements publics en R&D ayant conduit à des avancées dans les énergies renouvelables, les barrières bureaucratiques, particulièrement interprovinciales, et les contraintes réglementaires ralentissent la commercialisation. Le Canada et le Québec doivent s’assurer que les innovations énergétiques propres ne stagnent pas dans les institutions de recherche, mais qu’elles soient intégrées dans l’ensemble du marché.

2. L’innovation énergétique nécessite une adoption industrielle

La France napoléonienne a produit de nombreuses découvertes scientifiques majeures, mais celles-ci sont souvent restées confinées à des applications académiques ou militaires au lieu d’être largement mises en œuvre dans l’économie.

Le modèle décentralisé et axé sur le secteur privé de la Grande-Bretagne a permis une adoption rapide des innovations, en particulier dans le domaine de l’énergie.

Aujourd’hui, le Canada est confronté à des défis similaires. Bien qu’il soit un pionnier en matière d’innovation énergétique (comme l’hydroélectricité, le captage du carbone et les batteries), l’adoption reste limitée en raison de contraintes réglementaires et d’un manque d’incitations pour le secteur privé.

Pour exploiter pleinement le potentiel des technologies propres, le Canada doit aligner les forces du marché sur les incitations à l’innovation, garantissant que les avancées scientifiques se transforment en applications industrielles et grand public.

Encourager l’adoption nationale des technologies propres réduira la dépendance aux marchés étrangers, rendant ainsi le Canada plus résilient face à l’instabilité géopolitique.

IV. Priorités stratégiques pour le Canada et le Québec en matière d’énergie

Les leçons des approches historiques de la France et de la Grande-Bretagne offrent des orientations précieuses pour l’avenir énergétique du Canada et du Québec. Une transition énergétique réussie nécessite un équilibre stratégique entre le soutien gouvernemental et les politiques industrielles et le dynamisme du secteur privé. Les politiques doivent encourager l’investissement, accélérer l’adoption du marché et garantir la souveraineté énergétique pour assurer une résilience à long terme.

1. Encourager l’investissement privé dans l’énergie propre — Les recherches financées par le gouvernement doivent être couplées à des partenariats industriels pour assurer une adoption à grande échelle. Le Canada doit donner la priorité à l’indépendance énergétique face à l’agression économique des États-Unis.

2. Assurer la résilience des chaînes d’approvisionnement énergétiques — Les tensions commerciales montrent l’importance de la production nationale d’équipements électriques, de batteries et de technologies énergétiques propres.

3. Des pôles d’innovation régionaux, mais une coordination pancanadienne — Le Canada et le Québec doivent renforcer les pôles régionaux d’innovation énergétique tout en assurant une coordination nationale. Bien que les pôles puissent être spécialisés, une stratégie globale est essentielle pour maximiser l’innovation, le partage des ressources et la sécurité énergétique.

4. Faire de la souveraineté énergétique une priorité nationale — Face aux menaces géopolitiques, le Canada doit protéger ses actifs énergétiques stratégiques et son infrastructure contre toute prise de contrôle étrangère.

Conclusion : Le chemin vers l’innovation énergétique du Canada

Le contraste entre les avancées scientifiques structurées de la France et l’expérimentation pragmatique de la Grande-Bretagne met en lumière des enseignements essentiels pour le Canada et le Québec aujourd’hui. En combinant une recherche soutenue par l’État avec une commercialisation dynamique portée par le secteur privé, le Canada peut bâtir un secteur de l’énergie propre solide et résilient, garantissant ainsi la stabilité économique et la sécurité énergétique à long terme.

From Counter-Reformation to America First: How Isolationism Threatens Innovation and Progress

Summary: History shows that isolation leads to stagnation, while openness fosters innovation. The Counter-Reformation of the 16th and 17th centuries stifled Catholic Europe’s progress, just as Trump’s policies on immigration, trade, and fossil fuels threaten U.S. leadership today. Canada, however, stands to benefit—attracting talent, investment, and advancing AI and green tech.

(LinkedIn: https://www.linkedin.com/pulse/from-counter-reformation-america-first-how-threatens-progress-benoit-6jh7e)

Introduction

History consistently demonstrates that societies embracing openness, intellectual freedom, and collaboration thrive, while those turning inward risk stagnation. The Counter-Reformation of the 16th and 17th centuries saw Catholic Europe suppress dissent and restrict scientific progress, while Protestant nations fostered innovation and flourished. Today, the United States, under President Trump’s second term, is undergoing a similar inward turn—characterized by restrictive immigration policies, trade barriers (especially with Canada), and a renewed focus on fossil fuels. While some institutions resist this shift, these policies could weaken U.S. leadership in science, technology, and economic growth. Meanwhile, this crisis presents a unique opportunity for more open societies, such as Canada, to attract talent, investment, and technological leadership.


The Counter-Reformation and the Suppression of Scientific Innovation

The Counter-Reformation was the Catholic Church’s response to the Protestant Reformation, which originated in the Netherlands before spreading throughout Europe. In a bid to maintain control, the Church enforced strict censorship, persecuted dissenting intellectuals, and prioritized religious orthodoxy over free inquiry. As a result, once-prominent Catholic nations like Spain and Italy saw a decline in scientific contributions due to the rigid restrictions imposed by institutions like the Inquisition.

In contrast, Protestant nations such as the Netherlands and England embraced intellectual openness, paving the way for groundbreaking discoveries. Thinkers such as Johannes Kepler, Isaac Newton, and Robert Boyle flourished in these societies, pushing humanity forward in science, philosophy, and technology. The Counter-Reformation also slowed advancements in medicine by restricting human dissection and anatomical research, limiting medical knowledge in Catholic regions. Additionally, Catholic authorities censored and restricted the dissemination of scientific texts, hampering the spread of new ideas. The development of navigation, which relied on astronomical observations, was also affected by the resistance to heliocentric theories, delaying progress in exploration.

This divergence between Catholic and Protestant regions serves as a historical case study of how intellectual repression leads to stagnation, while openness fosters progress.

This historical lens is crucial in understanding the United States’ current trajectory under isolationist policies.


Trump’s Isolationism: Immigration and Trade Policies Closing Off the U.S.

Just as the Counter-Reformation stifled intellectual and economic advancement in Catholic Europe, President Trump’s policies in immigration and trade risk pushing the U.S. toward economic and technological insularity.

Immigration: The Loss of Global Talent

The U.S. has long been a magnet for the world’s brightest minds, fuelling its leadership in science, technology, and entrepreneurship. However, Trump’s immigration policies threaten this historic advantage:

  • Tightened Restrictions on High-Skilled Immigration: Increased visa backlogs, reduced work visa availability, and bureaucratic hurdles discourage top-tier professionals, redirecting them toward Canada and Europe.
  • Declining University Enrollment: A significant drop in international student applications weakens research institutions, which rely on foreign talent to maintain global competitiveness.

Although mass deportations primarily impact undocumented immigrants rather than high-skilled professionals, the broader anti-immigration stance deters global talent from considering the U.S. as an innovation hub. Much like how the Counter-Reformation drove intellectuals to Protestant regions, Trump’s immigration policies risk pushing top scientists, engineers, and entrepreneurs to more open societies. Countries like Canada, with proactive immigration policies, stand to benefit from this exodus of talent.

Trade: Economic Retrenchment and Damage to U.S.-Canada Relations

Trump’s economic nationalism mirrors the economic isolationism of Catholic Europe, which saw its global influence decline as Protestant nations expanded their trade networks.

  • Tariffs on Canada and Mexico: A 25% tariff on imports from Canada (10% on energy) and Mexico disrupts long-standing trade relationships and increases costs for consumers and businesses.
  • Weakening of the USMCA: While the United States-Mexico-Canada Agreement (USMCA) was intended to modernize NAFTA, recent tariff impositions undermine its stability and will trigger retaliatory measures.
  • “Buy American” Policies: These policies discourage supply chain integration with allies, making U.S. manufacturing less competitive globally.

Canada has responded by announcing 25% counter-tariffs on American goods, while leveraging its position as a major supplier of critical minerals—potentially shifting trade relationships toward Europe and Asia. As the U.S. isolates itself, Canada has a unique opportunity to expand its role in global trade networks and attract foreign investment.


Green and Climate Technologies: Losing Ground in the Race for the Future

Just as the Counter-Reformation rejected scientific advancements such as Galileo’s heliocentric model and medical discoveries, Trump’s rollback of forward-looking policies threatens U.S. leadership in emerging green technologies.

  • Return to Fossil Fuels: The administration has prioritized coal, oil, and natural gas over renewable energy, even as the rest of the world accelerates investment in clean energy.
  • Regulatory Rollbacks: Federal emissions regulations have been weakened, funding for renewable energy research slashed, and participation in international climate agreements reduced.
  • Global Competition: While the U.S. turns back to fossil fuels, China and, to a lesser extent, the European Union are dominating the global green energy sector, leading in electric vehicles, battery storage, hydrogen energy, and solar and wind power manufacturing.

The long-term risk is clear: if the U.S. continues to retreat from green innovation, it will lose its technological edge in industries that will define the future global economy—just as Catholic Europe lost its scientific edge to Protestant nations. However, Canada, with its commitment to renewable energy and environmental policies, has the potential to position itself as a leader in the transition to a green economy.


Institutional Resistance: Countering the Inward Turn

Despite Trump’s restrictive policies, several key institutions have resisted the U.S.’s inward shift, helping to preserve its role as an international leader in innovation and trade.

  • State Governments: Many states, particularly California, have maintained strong environmental and trade policies, signing independent agreements with global partners.
  • Tech and Business Leaders: Companies like Apple and Microsoft continue investing in international talent and supply chains, resisting protectionist policies.
  • Universities and Research Institutions: Top universities remain hubs for international collaboration, advocating for the continued influx of global talent.
  • International Partnerships: Canada and the EU can deepen ties with U.S. states and companies, ensuring that American innovation remains linked to global markets.

As these institutions push back against isolationist policies, they create openings for global strategic partnerships. This resistance highlights the possibility of maintaining and even strengthening economic and technological collaborations beyond the U.S. borders. Canada, in particular, stands to benefit by aligning with these forward-thinking entities, setting the stage for broader economic expansion and leadership in key industries.


Canada’s Opportunity for Economic Development

As the U.S. withdraws from global leadership in clean technology, trade, and green innovation, Canada can capitalize on this shift by taking proactive steps to drive economic growth:

  • Expanding Talent and Research Leadership: Canada can strengthen its position as a global innovation hub by expanding pathways for skilled workers, researchers, and entrepreneurs. Montréal and Toronto have become international AI powerhouses, attracting top-tier talent and investment in cutting-edge technology.
  • Strengthening Trade Networks and Supply Chains: By deepening economic ties with Europe, Asia, and other global partners, Canada can reduce reliance on the U.S. market. Strategic investments in critical supply chains—such as electrical equipment, battery technology, and artificial intelligence—will ensure long-term competitiveness in the evolving global economy.
  • Investing in Clean and Advanced Technologies: Increased government support for renewable energy, electric vehicle production, and sustainable infrastructure can position Canada as a leader in future industries. Building on AI-driven advancements, these sectors can drive sustainable economic growth and innovation.
  • Boosting Domestic Manufacturing and High-Value Industries: Strengthening Canada’s domestic manufacturing capabilities will help secure its role in high-value industries, ensuring economic resilience and positioning the country as a key player in the new global economy.

By embracing these opportunities, Canada can transform this crisis into a catalyst for long-term economic expansion, solidifying its role as a leader in trade, technology, and sustainability.


Conclusion: The Cost of Closing Off and the Opportunity for Others

Just as the Counter-Reformation stifled Catholic Europe’s intellectual and economic progress while Protestant nations thrived, Trump’s isolationist policies—particularly in immigration, trade, and emerging technologies—risk undermining U.S. leadership. However, institutional resistance within the U.S. suggests that, unlike Catholic Europe of the 16th and 17th centuries, the country may quickly recover from this inward turn if more open policies are reinstated in the future. Meanwhile, Canada and other open societies stand to gain from the U.S.’s retreat, attracting top talent, investment, and leadership in the industries of the future.

De la Contre-Réforme à l’Amérique d’abord : comment l’isolationnisme menace l’innovation et le progrès

Résumé : L’histoire montre que l’isolement mène à la stagnation tandis que l’ouverture favorise l’innovation. La Contre-Réforme des XVIe et XVIIe siècles a étouffé les progrès de l’Europe catholique, tout comme les politiques de Trump sur l’immigration, le commerce et les combustibles fossiles menacent aujourd’hui le leadership américain. Le Canada a toutefois tout à gagner en attirant des talents, des investissements et en faisant progresser l’IA et les technologies vertes.

(LinkedIn: https://www.linkedin.com/pulse/de-la-contre-r%25C3%25A9forme-%25C3%25A0-lam%25C3%25A9rique-dabord-comment-menace-benoit-marcoux-buele)

Introduction

L’histoire démontre constamment que les sociétés qui adoptent l’ouverture, la liberté intellectuelle et la collaboration prospèrent, tandis que celles qui se replient sur elles-mêmes risquent la stagnation. La Contre-Réforme des XVIe et XVIIe siècles a vu l’Europe catholique réprimer la dissidence et restreindre le progrès scientifique, tandis que les nations protestantes ont encouragé l’innovation et prospéré. Aujourd’hui, les États-Unis, sous le deuxième mandat du président Trump, connaissent un repli sur soi similaire, caractérisé par des politiques d’immigration restrictives, des barrières commerciales (en particulier avec le Canada) et un regain d’intérêt pour les combustibles fossiles. Bien que certaines institutions résistent à ce changement, ces politiques pourraient affaiblir le leadership des États-Unis dans les domaines de la science, de la technologie et de la croissance économique. Entre-temps, cette crise offre une occasion unique aux sociétés plus ouvertes, comme le Canada, d’attirer des talents, des investissements et un leadership technologique.


La contre-réforme et la suppression de l’innovation scientifique

La Contre-Réforme était la réponse de l’Église catholique à la Réforme protestante, qui a pris naissance aux Pays-Bas avant de se répandre dans toute l’Europe. Dans le but de maintenir le contrôle, l’Église a imposé une censure stricte, persécuté les intellectuels dissidents et donné la priorité à l’orthodoxie religieuse plutôt qu’à la libre enquête. En conséquence, des nations catholiques autrefois importantes, comme l’Espagne et l’Italie, ont connu une baisse des contributions scientifiques en raison des restrictions rigides imposées par des institutions comme l’Inquisition.

En revanche, les nations protestantes, telles que les Pays-Bas et l’Angleterre, ont adopté l’ouverture intellectuelle, ouvrant la voie à des découvertes révolutionnaires. Des penseurs, tels que Johannes Kepler, Isaac Newton et Robert Boyle, ont prospéré dans ces sociétés, poussant l’humanité vers l’avant dans la science, la philosophie et la technologie. La Contre-Réforme a aussi ralenti les progrès de la médecine en limitant la dissection humaine et la recherche anatomique. Cela a limité les connaissances médicales dans les régions catholiques. De plus, les autorités catholiques ont censuré et restreint la diffusion de textes scientifiques, ce qui a entravé la diffusion de nouvelles idées. Le développement de la navigation, qui dépendait d’observations astronomiques, a aussi été freiné par la résistance aux théories héliocentriques, ce qui a entravé les progrès de l’exploration.

Cette divergence entre les régions catholiques et protestantes sert d’étude de cas historique sur la façon dont la répression intellectuelle conduit à la stagnation, tandis que l’ouverture favorise le progrès.

Cette lentille historique est cruciale pour comprendre la trajectoire actuelle des États-Unis dans le cadre de politiques isolationnistes.


Isolationnisme de Trump : les politiques d’immigration et de commerce ferment les États-Unis

Tout comme la Contre-Réforme a étouffé le progrès intellectuel et économique dans l’Europe catholique, les politiques du président Trump en matière d’immigration et de commerce risquent de pousser les États-Unis vers l’insularité économique et technologique.

L’immigration : la perte de talents mondiaux

Les États-Unis ont longtemps été un aimant pour les esprits les plus brillants du monde, alimentant leur leadership dans les sciences, la technologie et l’entrepreneuriat. Cependant, les politiques d’immigration de Trump menacent cet avantage historique :

· Restrictions renforcées sur l’immigration hautement qualifiée : L’augmentation des arriérés de visas, la réduction de la disponibilité des visas de travail et les obstacles bureaucratiques découragent les professionnels de haut niveau, les redirigeant vers le Canada et l’Europe.

· Baisse des inscriptions à l’université : Une baisse significative des demandes d’étudiants internationaux affaiblit les établissements de recherche, qui comptent sur les talents étrangers pour maintenir la compétitivité mondiale.

Bien que les expulsions massives touchent principalement les immigrants sans papiers plutôt que les professionnels hautement qualifiés, la position anti-immigration plus large dissuade les talents mondiaux de considérer les États-Unis comme un centre d’innovation. Tout comme la façon dont la Contre-Réforme a conduit les intellectuels dans les régions protestantes, les politiques d’immigration de Trump risquent de pousser les meilleurs scientifiques, ingénieurs et entrepreneurs vers des sociétés plus ouvertes. Des pays comme le Canada, dotés de politiques d’immigration proactives, profiteront de cet exode de talents.

Commerce : Compressions économiques et dommages aux relations entre les États-Unis et le Canada

Le nationalisme économique de Trump reflète l’isolationnisme économique de l’Europe catholique, qui a vu son influence mondiale décliner à mesure que les nations protestantes élargissant leurs réseaux commerciaux.

· Droits de douane sur le Canada et le Mexique : Un droit de douane de 25 % sur les importations en provenance du Canada (10 % sur l’énergie) et du Mexique perturbe les relations commerciales de longue date et augmente les coûts pour les consommateurs et les entreprises.

· Affaiblissement de l’AEUMC : Alors que l’Accord États-Unis-Mexique-Canada (AEUMC) visait à moderniser l’ALENA, les récentes impositions de droits de douane minent sa stabilité et déclencheront des mesures de rétorsion.

· Politiques «?Buy American?» : Ces politiques découragent l’intégration de la chaîne d’approvisionnement avec leurs alliés, ce qui rend le secteur manufacturier américain moins compétitif à l’échelle mondiale.

Le Canada a réagi en annonçant des contre-droits de douane de 25 % sur des produits américains, tout en tirant parti de sa position en tant que fournisseur important de minéraux essentiels, ce qui pourrait modifier les relations commerciales vers l’Europe et l’Asie. Alors que les États-Unis s’isolent, le Canada a une occasion unique d’élargir son rôle dans les réseaux commerciaux mondiaux et d’attirer les investissements étrangers.


Technologies vertes et climatiques : perdre du terrain dans la course à l’avenir

Tout comme la Contre-Réforme a rejeté les progrès scientifiques, tels que le modèle héliocentrique de Galilée et les découvertes médicales, le recul de Trump des politiques tournées vers l’avenir menace le leadership des États-Unis dans les technologies vertes émergentes.

· Retour aux combustibles fossiles : L’administration a donné la priorité au charbon, au pétrole et au gaz naturel plutôt qu’aux énergies renouvelables, alors même que le reste du monde accélère les investissements dans l’énergie propre.

· Reculs réglementaires : Les règlements fédéraux sur les émissions ont été affaiblis, le financement de la recherche sur les énergies renouvelables a été réduit et la participation aux accords internationaux sur le climat a diminué.

· Concurrence mondiale : Alors que les États-Unis reviennent aux combustibles fossiles, la Chine et, dans une moindre mesure, l’Union européenne dominent le secteur mondial de l’énergie verte, en tête dans les secteurs des véhicules électriques, du stockage de batteries, de l’énergie hydrogène et de la fabrication d’énergie solaire et éolienne.

Le risque à long terme est clair : si les États-Unis continuent de se retirer de l’innovation verte, ils perdront leur avantage technologique dans les industries qui définiront la future économie mondiale, tout comme l’Europe catholique a perdu son avantage scientifique au profit des nations protestantes. Cependant, le Canada, grâce à son engagement à l’égard des énergies renouvelables et des politiques environnementales, a le potentiel de se positionner comme un chef de file dans la transition vers une économie verte.


Résistance institutionnelle : contrer le virage vers l’intérieur

Malgré les politiques restrictives de Trump, plusieurs institutions clés ont résisté au repli d’intérieur des États-Unis, aidant à préserver leur rôle de leader international en matière d’innovation et de commerce.

· Gouvernements des États : De nombreux États, en particulier la Californie, ont maintenu des politiques environnementales et commerciales solides, signant des accords indépendants avec des partenaires mondiaux.

· Leaders technologiques et commerciaux : Des entreprises comme Apple et Microsoft continuent d’investir dans les talents et les chaînes d’approvisionnement internationaux, résistant aux politiques protectionnistes.

· Universités et instituts de recherche : Les meilleures universités demeurent des plaques tournantes de la collaboration internationale, plaidant pour l’afflux continu de talents mondiaux.

· Collaborations internationales : Le Canada et l’Union européenne peuvent renforcer leurs liens avec les États-Unis et les entreprises, s’assurant que l’innovation américaine reste ancrée sur les marchés mondiaux.

Alors que ces institutions s’opposent aux politiques isolationnistes, elles créent des ouvertures pour des partenariats stratégiques mondiaux. Cette résistance met en évidence la possibilité de maintenir et même de renforcer les collaborations économiques et technologiques au-delà des frontières américaines. Le Canada, en particulier, a tout à gagner à s’aligner sur ces entités avant-gardistes, préparant ainsi le terrain pour une expansion économique et un leadership plus larges dans des industries clés.


Les possibilités de développement économique du Canada

Alors que les États-Unis se retirent du leadership mondial en matière de technologie propres, de commerce et d’innovation verte, le Canada peut tirer parti de ce changement en prenant des mesures proactives pour stimuler la croissance économique :

· Accroître le talent et le leadership en recherche : Le Canada peut renforcer sa position en tant que centre d’innovation mondial en élargissant les voies pour les travailleurs qualifiés, les chercheurs et les entrepreneurs. Montréal et Toronto, en particulier, sont devenues des puissances internationales de l’IA, attirant des talents de haut niveau et des investissements dans la technologie de pointe.

· Renforcement des réseaux commerciaux et des chaînes d’approvisionnement : En approfondissant les liens économiques avec l’Europe, l’Asie et d’autres partenaires mondiaux, le Canada peut réduire sa dépendance à l’égard du marché américain. Les investissements stratégiques dans les chaînes d’approvisionnement essentielles, comme l’équipement électrique, la technologie des batteries et l’intelligence artificielle, assureront la compétitivité à long terme de l’économie mondiale en évolution.

· Investir dans les technologies propres et de pointe : Un soutien gouvernemental accru à l’énergie renouvelable, à la production de véhicules électriques et à l’infrastructure durable peut positionner le Canada comme un chef de file dans les industries futures. En s’appuyant sur les progrès réalisés par l’IA, ces secteurs peuvent stimuler une croissance économique et une innovation durables.

· Stimuler la fabrication nationale et les industries de grande valeur : Le renforcement des capacités de fabrication nationales du Canada aidera à renforcer son rôle dans les industries de grande valeur, à assurer la résilience économique et à positionner le pays comme un acteur clé de la nouvelle économie mondiale.

En saisissant ces possibilités, le Canada peut transformer cette crise en un catalyseur d’expansion économique à long terme, renforçant ainsi son rôle de chef de file en matière de commerce, de technologie et de durabilité.


Conclusion : Le coût de la fermeture et l’occasion pour les autres

Tout comme la Contre-Réforme a étouffé le progrès intellectuel et économique de l’Europe catholique tandis que les nations protestantes prospéraient, les politiques isolationnistes de Trump — en particulier dans l’immigration, le commerce et les technologies émergentes — risquent de saper le leadership américain. Cependant, la résistance institutionnelle au sein des États-Unis suggère que, contrairement à l’Europe catholique XVIe et XVIIe siècles, le pays pourrait rapidement se remettre de ce virage intérieur si des politiques plus ouvertes sont rétablies à l’avenir. Pendant ce temps, le Canada et d’autres sociétés ouvertes ont tout à gagner du recul des États-Unis, attirant les meilleurs talents, les investissements et le leadership dans les industries de l’avenir.

Quelques réflexions sur le prix du carbone


L’effet de mettre un prix général sur le carbone est d’amener les entreprises et les consommateurs à chercher des solutions pour réduire ce coût en utilisant des technologies renouvelables, la biomasse ou de l’hydrogène à bas carbone.

Cependant, le prix du carbone à n’importe quel niveau politiquement viable ne sera pas suffisant pour faire la transition dans les délais requis.
• C’est certainement le cas en efficacité énergétique, par exemple, car devenir plus efficace diminue l’impact du prix du carbone.
• Aussi, un prix sur le carbone visible aux consommateurs peut entraîner une vive opposition et, finalement, retarder la transition.
• Pour les entreprises, ajouter un coût dans un marché concurrentiel peut réduire la compétitivité.

Un prix sur le carbone est un peu comme une hache pour dégrossir un tronc d’arbre. C’est bien, mais pour finir le totem de la transition, il faut aussi des outils plus précis et on utilise alors des couteaux ou des ciseaux de sculpteur. Ainsi, en plus du prix sur le carbone, des politiques plus ciblées sont requises. Pour y arriver collectivement, il faudra créer un climat propice aux investissements, adopter des innovations, et changer nos comportements, car seulement mettre un prix sur le carbone et conduire des voitures électriques ne suffiront pas.

Book Review: “Branchée: Hydro-Québec et le futur de l’électricité” (French version; in English : “Charging Ahead: Hydro-Québec and the Future of Electricity”)

Jean-Benoit Nadeau and Julie Barlow have published this worthwhile book on Hydro-Québec. I have recently read the French version, and the English translationwill be available on October 15, 2019. I would highly recommend this book to people who need to understand what is driving Hydro-Québec. Electrical system vendors and other industry stakeholders will certainly appreciate the perspective that Branchée/Charging Aheadbrings. However, the authors largely (but not exclusively) rely on internal Hydro-Québec sources and sometimes come across as overly praising the company. Other, more critical, sources might be needed to grasp the complexities of the energy sector in Québec. 

Overall, Branchée/Charging Ahead is a very well-documented book on Hydro-Québec and current strategic directions. Fifty-three people were interviewed, including a large number of Hydro-Québec personnel, up to the CEO, Éric Martel. The book also draws on multiple third-party references and previous article published by the authors. 

Branchée/Charging Aheadstarts with a history of Hydro-Québec. The history of Hydro-Québec innovations is highlighted, with the 735 kV transmission lines being described as “Hydro-Québec’s great technical prowess”[i]. However, this technology dates back to the 1960s’. While there has been nothing remotely comparable since then, the book lists other examples of Hydro-Québec innovations, such as the LineRanger robot, Li-Ion batteries and TM4 electric motors. The book rightfully says that the “commercialization of inventions is an old fantasy of Hydro-Québec. For 30 years, all CEOs have talked about their amazing potential. But their promises have always disappointed.”[ii]TM4 is a good example given in the book: TM4 used up $500 million over 20 years, but Hydro-Québec sold 55% of it to Dana for only $260 million.[iii]

The book contains many noteworthy and hard-to-find current facts and numbers that industry professional might find valuable, such as:

  • As of early 2019, there are 716 prosumers (distributed generators) on Hydro-Québec’s network.[iv]
  • By controlling just 4 baseboard smart thermostats, Hydro-Québec can reduce the peak load of a typical household by 1 kW; Ten smart thermostats lead to a 2 kW saving.[v]
  • Hydro-Québec is running a smart home pilot project with 400 households, intending to launch a new smart home product through an unnamed subsidiary; Sowee, from Électricité de France, is given as a comparable.[vi]

The authors do not attempt to explain their paradox of innovation promises to have always failed Hydro-Québec and Hydro-Québec continuing to heavily invest in innovation. 

Toward the end, Branchée/Charging Ahead provides many insights into the thinking of Hydro-Québec senior managers, including where they see the industry going, how it is going to affect Hydro-Québec, what strategic imperatives ensue, and what Hydro-Québec needs to do. Undoubtedly, vendors could find in here material to enrich proposals and presentations. 

I found very few instances of questionable facts in the book. The Philadelphia Navy Yard microgrid is given as an example[vii], but this project has now been abandoned and is being reborn on a much smaller scale. Economically, I also disagree with the statement that Hydro-Québec is well positioned to develop hydrogen production[viii]– there is far more value in using dispatchable hydro to balance renewable resources than to produce hydrogen from electricity (which is a highly inefficient process). 

Furthermore, I believe that many customers, outside industry expert, vendors or other utilities might object to some praising characterization of Hydro-Québec, such as when the authors state that Hydro-Québec “is one of the best managed electricity grids on the continent and is admired by the largest companies in the industry”[ix]or that it has one of the most reliable grids on the continent[x]. The book would have been more balanced by giving a greater voice to those external stakeholders. Also, given the generally positive perspective that the authors are offering, Branchée/Charging Aheadwill certainly support Hydro-Québec when it tries to gather support for Bill 34[xi].  

All this being said, I greatly enjoyed reading the book and I highly recommend it to anyone wanting to better understand this fascinating company. However, I would caution against drawing conclusions or designing policies based solely on Branchée/Charging Aheadwithout balancing some of the ideas with more independent sources.   


[i]                Chapter 2. Quotes from the book are translated from the French edition. 

[ii]               Chapter 10.

[iii]              Chapter 10.

[iv]               In the introduction and later in chapters 4, 5 and 6.

[v]                Chapter 6.

[vi]               Chapter 6.

[vii]              Chapter 6.

[viii]             Chapter 6

[ix]               In the introduction.

[x]                Chapter 1.

[xi]               See https://benoit.marcoux.ca/blog/bill-34-selling-to-hydro-quebec/for my take on Bill 34. 

How Bill 34 Will Affect Vendors Selling to Hydro-Québec

The Government of Québec has tabled Bill 34[1]that simplify the rate-setting process for Hydro-Québec Distribution.[2]Essentially, most distribution rates are frozen for 2020, and then adjusted for inflation until 2025, when a rate review would occur. Additionally, the bill requires Hydro-Québec to reimburse to customers of some $500 million before 1 April 2020.[3]It should be noted that Hydro-Québec currently has the lowest residential rates in North America.[4]

This Bill is a significant change from the traditional rate base rate-of-return regulation that previously subjected Hydro-Québec to yearly rate filing. Based on my personal marketing experience in the electricity industry, this post outlines my views of how Bill 34 may change some of Hydro-Québec business drivers when dealing with its vendors, presumably leading Hydro-Québec to faster decision-making in purchasing, smarter assessment of costs, and a greater appetite for innovative solutions.

Before: Traditional Rate Base Rate-of-Return Regulation

The electricity distribution business is a natural monopoly. This means that it is in the interest of society to have just one distribution utility in a given territory. It is easy to understand the rationale: you would not want to have multiple sets of poles along roads; one set is more than enough. However, left to itself, a distribution utility with a monopoly could charge unreasonable rates for use of its bottleneck facility.[5]

In most of Canada and the United States, electric utilities are regulated using a traditional rate base rate-of-return regulation regime. Under this regime, the sum of all regulated costs – essentially operating expenses, depreciation on assets (resulting from past capital expenditures), interests on debt, taxes, as well as an allowed shareholder returns on investments (i.e. a reasonable profit) – are recovered from customers. This is called revenue requirement or required revenues. Required revenues are allocated across the customer base in a variety of ways, primarily on the basis of the energy distributed (cents per kilowatt-hour, ¢/kWh), as well as peak load (dollars per kilowatt, $/kW) for some commercial and industrial customers. In practice, different classes of customers get different rates, but revenues projected during a regulatory rate case have to be equal to revenue requirements. If there is a significant variance between the projected revenues and the actual revenues in a year, adjustments are normally made in subsequent years.[6]

Obviously, regulated utilities are not allowed to spend anyway they want: they have to prove to their provincial regulator – the Régie de l’énergie in Québec, the Alberta Energy Board, the Ontario Energy Board, etc. – that their costs (both operating expenses and capital expenditures) are necessary and prudent. These arguments are aired during public rate cases – yearly in the case of Hydro-Québec, up to now – during which various interveners, typically representing customer groups, submits reports and ask questions. The process can be slow, adversarial and excruciating as all details of operations are looked at and need to be justified – the regulator often does not trust the utility and even activities and investments that a utility may present as essential may not be approved. 

Rate-of-return regulation of utility monopolies has served relatively well as a market substitute for a century, but it has its drawbacks. I’ll retain three issues for discussion here: slow innovation, poor service quality, and uneconomic decisions.

Innovation tends to be among the casualties of rate-of-return regulations: the slow regulatory cycle, the public scrutiny and the second-guessing by interveners makes utilities extremely risk-averse and slow to integrate new technologies. For example, as part of rate cases, utilities sometimes specify models of power equipment, which become the standard products used in the network. Because another complex homologation process would get in the way, product selection may not be revised for many years, even decades, often until the vendor cease production. However, over time, utilities often end up customizing those products, based on experience or new needs, rather than seeking newer products. 

Rate-of-return regulation is an economic form of regulation that does not properly account for service quality. It is difficult to integrate service quality metrics in this regulatory framework and offering varying levels of service quality depending on willingness to pay is not practical. Not surprisingly, electric utilities tend to have negative Net Promoter Scores (NPS), a loyalty measure, with generally far more detractors than promoters among customers.[7]

Since their revenues are practically known in advance following rate setting, regulated utilities look at their business upside-down in comparison to companies operating in a competitive, free market:

  • Shareholders earn a return on all utility assets – the more, the better. New investments mean a larger asset base, on which the shareholders are allowed to claim a return, meaning that net income will also be higher. There is a strong incentive for utilities to buy more equipment or to gold-plate it, although interveners may oppose, and regulators may not agree. 
  • Regulated utilities effectively pass operating expenses to their customers. Indeed, lowering (or increasing) operating expenses simply lowers (or increases) required revenues, but net income remains unaffected. Yet, the regulatory process tends to compress controllable operating expenses (like customer service or maintenance) in expectation of raising efficiency by the utility. Utilities may actually go along, shareholders preferring to compress operating expenses than investments in assets. 

For vendors, traditional rate base rate-of-return regulations mean that making normal sales arguments often does not make sense in a utility world: 

What vendors may sayWhat utility people may think
“You would be the first in the industry to implement this new technology.”“…And go through hell trying to get it approved.”
“You’ll save on capital expenditures with this new equipment.”“Why would we do this? Shareholders want to justify more capital expenditures, not less.”
“You’ll be making more profit by adopting my cost-saving solution.”“No, we’ll have to pass on the savings to customers at the next rate case and not make more profit.”

Surprisingly, it seems that few vendors understand this traditional utility buying logic, although it is very much the normal case across Canada and the United States. However, Bill 34 is changing all this in Québec.

What Is Bill 34 Changing?

Bill 34 freezes most distribution rates for 2020, followed by yearly adjustments for inflation until 2025, when a rate review would occur. Therefore, Hydro-Québec would no longer have to file rate applications, with detailed costs justifications, every year. Under the Bill, Hydro-Québec is not required to obtain authorization for its infrastructure investment projects and changes to the electricity distribution network. Similarly, commercial programs do not need approval. In contrast to traditional regulation, Bill 34 effectively disconnects costs and revenues for 5 years and should introduce more common business decision-making. 

Bill 34 also stops the Régie efforts to move to a Performance-Based Regulation (PBR). PBR is increasingly popular to regulate utilities[8]. In Canada, Alberta has adopted PBR.[9]Another good example is Great Britain, with its RIIO (Revenue = Incentives + Innovation + Outputs) framework.[10]PBR generally aims to balance multiple variables, such as quality of service and costs, while freeing utilities to innovate. Without presuming of the rationale behind Bill 34, it may be that the very low costs of electricity in Québec in comparison to the jurisdictions where PBR was implemented, as well as Hydro-Québec’s renewable generation fleet, present a simpler approach toward the same objectives. 

After: Faster, Risk-Taking and Innovative?

Hydro-Québec remains a natural monopoly, without direct competitive pressure. However, with Bill 34, decision-making should become much closer to that of “ordinary” commercial business, with a new-found flexibility and a greater drive toward efficiency and business innovations. Hydro-Québec will be incentivized to reduce costs to increase net income, as revenues will be stable (after inflation). In particular, the new framework removes the bias toward capital expenditures and rewards a smarter control of operating expenses. For instance, with greater flexibility, Hydro-Québec might increase maintenance and extend life of some power equipment at the same time that it might replace other assets with advanced systems – all in the name of efficiency.

All this may change how Hydro-Québec will interact with equipment and service vendors, although any change to purchasing decision-making will undoubtedly depend on management decisions and may be slowed by the natural inertia of the company. 

Nevertheless, Hydro-Québec may become more open to acquire new products and services from new vendors, with a corresponding risk for established vendors. High-end or customized (and therefore more expensive) products from established vendors may be especially at risk of substitution by less expensive or industry-standard ones. In some cases, the number of vendors supplying a type of product dwindled to just one over the years; it now may be that Hydro-Québec will seek to split contracts with a competitor to try to bring down costs on commodity products. On the other end, like common in other industries, Hydro-Québec may also seek broad strategic partnerships for more complex products, with favorable contract terms for Hydro-Québec in exchange for a vendor exclusivity in some product categories. 

With the greater flexibility brought by Bill 34, Hydro-Québec may also become more inclined to try out innovative products or systems in its distribution network, and we could see faster decisions to deploy those innovations. This might come at an opportune time, as other utilities introduced new grid technologies in order to support distributed generation (especially solar) at a very large scale[11]; Hydro-Québec could learn from the vendors involved in these deployments.

Similarly, Bill 34 might enable Hydro-Québec to accelerate the launch of new products or services to its customers, possibly in collaboration with external vendors. Hydro-Québec has been innovative in researching new uses for electricity and energy efficiency system, going as far as building houses to test smart home technologies.[12]Hydro-Québec publicly expressed interest in how smart home, solar generation, energy storage and microgrids could impact its network.[13]Other utilities have already introduced services and products to their customers around these concepts, like BC Hydro (CaSA smart thermostats)[14], Green Mountain Power (Tesla batteries and FLO smart electric vehicle chargers)[15], Hydro Ottawa (Google smart assistant),[16]and many more; it would not be surprising to see Hydro-Québec following suit. 

What May Not Change

While Bill 34 will change many things, some important practices should remain. For example, Hydro-Québec is extremely serious about cybersecurity[17]; vendors should still expect to have to meet stringent cybersecurity requirements, for good reasons. As a Québec crown corporation, Hydro-Québec also remains subjected to normal government buying policies, like requiring bids beyond certain amounts and strict rules when dealing with vendors[18]– this too will remain. 

Contrary to performance-based regulatory regimes like RIIO in Great Britain (see above), Bill 34 does not provide explicit incentives to improve the reliability of the electricity service. While this is not a change from the current regulatory regime, it should be noted that the reliability of Hydro-Québec electricity services has been degrading over the last years.[19]However, repairing the network after an outage does cost money, and some vendors could highlight how their solution prevent outages or reduce the cost of repairs. Furthermore, Hydro-Québec management could conclude that maintaining sufficient reliability is essential to avoid a decision to return to traditional regulation in 2025. 

Also, Bill 34 specifically maintains Hydro-Québec’s obligation to file an annual report. Those reports include a wealth of information on the organization, the performance and the financial situation of Hydro-Québec.[20]

Finally, utilities, including Hydro-Québec, publish public performance indicators.[21]Usually, those indicators are also used in management incentive plans. Showing the impact of a solution on performance indicators will remain a sound sales tactics when selling to utilities. 

Closing Words

Once Québec’s national assembly adopts Bill 34, probably in the Fall, it will certainly become an experiment that will be carefully watched by Canadian regulators. Leveraging the low costs of renewable electricity in Québec, it may encourage greater efficiency and business performance by Hydro-Québec, without the complexity of a performance-based regulatory regimes. 

For vendors, the Bill may also fundamentally change how Hydro-Québec should be approached, with potentially a much greater attention to total costs and partnerships than before. 

Do not hesitate to contact me to discuss further. 

Benoit Marcoux, benoit@marcoux.ca, +1 514-953-7469.


[1]               See “An Act to simplify the process for establishing electricity distribution rates”,  http://www.assnat.qc.ca/en/travaux-parlementaires/assemblee-nationale/42-1/journal-debats/20190612so/projet-loi-presentes.html, accessed 20190614.

[2]               Bill 34 only affects the distribution division of Hydro-Québec. The transmission (TransÉnergie) and generation (Production) divisions are not affected. 

[3]               See http://news.hydroquebec.com/en/press-releases/1510/electricity-rates-adoption-of-a-simplified-approach-that-will-guarantee-low-rates/, accessed 20190620. 

[4]               See http://www.hydroquebec.com/residential/customer-space/rates/comparison-electricity-prices.html, accessed 20190615.

[5]               Note that the natural monopoly does not extend to energy retail and generation. In many jurisdictions, notably in most of Alberta, Texas and Europe, there are many energy retailers buying electricity from generators and offering various plans to customers. However, this energy is supplied through electricity distributors that have the poles and conductors up to customers’ homes. In Canada, provinces other than Alberta and Ontario have only vertically integrated distributors and retailers, i.e., the distributor is also the only retailer of electricity. 

[6]               To some extent, Bill 34 is the result of lack of adjustments from over-earning in previous years, as the provincial government, owners of Hydro-Québec, kept these surpluses. This resulted in a delicate political situation, as many people saw this as a disguised tax.

[7]               See CEA Opinion Research, 2014 National Public Attitudes for NPS of Canadian utilities, and https://en.m.wikipedia.org/wiki/Net_Promoter, accessed 20190615, for an overview of the concept. 

[8]               See http://go.woodmac.com/webmail/131501/471713673/8ec22b38df7f81ef4f8278af14095e1bb711214dffd0ee90dc9a250ab8bb5970, accessed 20290619, for an overview of PBR adoption in the United States.

[9]               See http://www.auc.ab.ca/pages/distribution-rates.aspx, accessed 20190615.

[10]             See https://www.ofgem.gov.uk/network-regulation-riio-model, accessed 20190615.

[11]             For example, there are 840,878 residential solar projects in California (https://www.californiadgstats.ca.gov/charts/, accessed 20190617) but only about 700 in Québec (see https://www.lapresse.ca/affaires/economie/energie-et-ressources/201903/22/01-5219334-mini-boom-de-production-denergie-solaire-au-quebec.php, in French, accessed 20190617). Integrating a large number of distributed generators in a distribution network is challenging, and utilities in some other jurisdictions had to innovate to make it work.

[12]             See https://ici.radio-canada.ca/nouvelle/1016006/hydro-quebec-maisons-futur-shawinigan-energie-solaire-thermostats(in French), accessed 20190617.

[13]             See http://plus.lapresse.ca/screens/f2ad982b-9fda-469f-a3f2-86116ab0a46a__7C___0.html(in French), accessed 20190617.

[14]             See https://www.bchydro.com/powersmart/energy-management-trials/casa-thermostat-trial.html, accessed 20190617. 

[15]             See https://greenmountainpower.com/products-all/, accessed 20190617.

[16]             See https://hydroottawa.com/save-energy/innovation/smart-audio, accessed 20190617. 

[17]             For example, Hydro-Québec is funding an industrial research chair in smart grid security at Concordia University – see  http://www.nserc-crsng.gc.ca/Chairholders-TitulairesDeChaire/Chairholder-Titulaire_eng.asp?pid=981, accessed 20190617.

[18]             See https://www.hydroquebec.com/suppliers/becoming-supplier/safe-ethical-and-responsible-procurement.html, accessed 20190618.

[19]             The average number of minutes of outages per Hydro-Québec customer, excluding major events like storms, has been steadily increasing, from 126 minutes in 2013 to 181 in 2018. See http://www.regie-energie.qc.ca/audiences/RappHQD2013/HQD-09-02-Indicateursdeperformance.pdfand http://publicsde.regie-energie.qc.ca/projets/501/DocPrj/R-9001-2018-B-0060-RapAnnuel-Piece-2019_04_18.pdf, respectively for 2013 and 2018, in French, accessed 20190617. 

[20]             See http://www.regie-energie.qc.ca/audiences/RapportsAnnuels_DistribTransp.html, accessed 20190615, for past annual reports in French.  

[21]             See http://publicsde.regie-energie.qc.ca/projets/501/DocPrj/R-9001-2018-B-0060-RapAnnuel-Piece-2019_04_18.pdffor Hydro-Québec’s 2018 performance indicators, in French, accessed 20190618. 

Digital Utility of the Future Conference

Last month, I chaired the Digital Utility of the Future Conference in Toronto (http://ikonnect.world/DigitalUtilitiesoftheFuture2/). Based on feedback from many participants, the event was a clear success and I am looking forward to the 2020 edition. Having mostly been out of the country on business since then, I would now like to share some reflections on the event.

First, the multiple presentations highlighted the extent to which digital technologies now permeate the utility world. The energy transition adds tremendous sophistication to the electricity distribution network, relies on renewed engagement by customers, and brings many new regulatory and environmental constraints. As the transformation of other industries have shown, such complexity can only be dealt with through better management of corporate resources, especially information.

Second, adapting to the energy transition and leveraging information a big task. The rule book is still being written. Many innovations were presented. In a few years, we will look back at some of these ideas and admire the foresight of their promoters; other ideas will be dead ends. However, it is clear now that the future of the utility industry will depend on innovations to a much greater extent than was the case a few years ago.  

Third, participants were a mix of utility and vendor representatives, with many presentations being made by representative from both. I think that the best combination. Utilities know their business but may be insulated behind a regulatory wall. Vendors see multiple clients, inside and outside the energy industry, but may not understand all the subtilities of a regulated business. Having both can get sparks flying (in a good way). 

Finally, I would like to thank all participants, sponsors and presenters. I think that we all had a great time debating what the digital future of utilities may look like.

Let’s Build a Smarter Planet: Energy and Utilities

I presented on the future of electric utilities at the “Les entretiens Jacques-Cartier” on October 3, 2011. The presentation itself is in English.

Here is the presentation, with notes: