July 5, 2010
Pierre-Olivier Pineau (on the left), Associate Professor with the Department of Management Sciences, and Vincent Lefebvre (opposite), a final-year MSc student (Marketing option), won the 2010 Outstanding Paper Award from the Emerald Literati Network for the excellence of their article entitled “The value of unused interregional transmission: Estimating the opportunity cost for Quebec (Canada),” published in the International Journal of Energy Sector Management.
The Emerald Literati Network Awards for Excellence are presented by the Emerald Group, which produces some 200 English-language scientific and professional publications. The award received by Professor Pineau and his student acknowledges the quality of research published in the group’s scholarly journals during the previous year.
The winning article looks at the opportunity cost of the unused capacity of 13 electricity transmission lines between Quebec and its neighbours (New Brunswick, New England, New York state, Ontario) in 2006, 2007 and 2008. According to the authors’ calculations, most of the lines are used at only 50% of their capacity, on average. This represents a business opportunity of some 25 terawatthours per year, or a potential profit of about $1 billion, which could boost the dividend paid by Hydro-Québec to the Quebec government by close to 50%.
In conclusion, the authors note that these additional exports could help to reduce production by thermal power plants, which generate greenhouse gases. They emphasize that the main obstacle to increasing electricity exports is not transmission line capacity but rather hydro-electricity price regulation. In their opinion, better integration of electricity markets and prices would lead to social (economic and environmental) benefits that would outweigh the benefits of the low rates that Quebec consumers now enjoy.