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A Sustainable Energy Future

Thierry Vandal, President and Chief Executive Officer, Hydro-Québec, and Chair of the Board of Directors, The Conference Board of Canada
May 1, 2009

Thierry Vandal has been involved in the North American energy sector for more than 25 years. He has worked in the oil industry (operations and marketing), the petrochemical industry (production and international marketing), and the natural gas industry (business development and strategic planning).

Mr. Vandal joined Hydro-Québec in November 1996. He served as Vice-President – Strategic Planning and Business Development, and then in 2001 became President of Hydro-Québec Production. In April 2005, he was named President and Chief Executive Officer of Hydro-Québec.

Mr. Vandal holds an engineering degree from the École polytechnique (Université de Montréal, 1982) and an MBA from the École des hautes études commerciales (Université de Montréal, 1995). In 2007, the Université de Montréal awarded him an honorary doctorate to underscore his outstanding professional contribution to the energy sector. Mr. Vandal is Chairman of the boards of the Société d’énergie de la Baie James and Hydro-Québec International. He sits on the boards of the École des hautes études commerciales de Montréal and McGill University. He is also Chairman of the Board of Collège Notre-Dame.

Mr. Vandal joined the Conference Board’s Board of Directors in February 2004 and assumed the role of Vice-Chair later that year. In November 2008, he began a two-year term as Chair of the Board.

InsideEdge: What motivates Hydro-Québec to launch large new hydroelectric projects like the 1550-megawatt Romaine River project, even in these uncertain times?

Thierry Vandal: The Romaine River project is a $6.5-billion investment that will add over 1,500 megawatts to our existing 40,000 megawatts of production capacity. We hope to begin construction later this spring, with energy coming on stream gradually starting in 2014.

The key is to control the construction costs. We’ve commissioned over $4-billion worth of new hydro facilities in the last four years—on budget and ahead of schedule—and we have another $6-billion worth underway ahead of the Romaine River project. The costs and schedules for those projects are also under control; we’ve got great people at Hydro-Québec for the engineering, project management, and construction management sides of our activities. Hydro-Québec does all its concept engineering and project/construction management in house. We’re very comfortable managing our construction risk. So we know these projects can be brought in on time and on budget, if we get the permits completed on time.

This is clean, renewable energy. It’s a very sound investment in a world that will be more and more carbon constrained.

This is renewable energy for the long term, and it’s cost competitive with the alternatives out there in the long term.

InsideEdge: With climate change near the top of the public agenda, what opportunities exist for Hydro-Québec to expand its production of clean, renewable power? What regulatory and policy reforms are needed to take advantage of these opportunities?

Thierry Vandal: If we’re going to address global warming, we’re going to need three things: greater energy efficiency, more renewable energy, and technological innovation. Hydro-Québec is about all those things. We’re a renewable energy company. We’re also very committed to greater energy efficiency in our operations and distribution. And we’re continuing to bring on new technology in all our fields of activity. So the opportunities are there for Hydro-Québec, which is why we’ll be investing $25 billion in the coming five years to pursue these opportunities. A good portion of that investment will be in the very competitive wholesale power business. The wholesale power market is now very integrated at the North American level.

In terms of policy and regulations, we’re all expecting the question of carbon regulation to be addressed in an efficient and predictable way in the near term.

This is renewable energy for the long term, and it’s cost competitive with the alternatives out there in the long term. 

InsideEdge: You are a champion of the Conference Board’s new Centre for the North. Given the enormous impact of climate change on Canada’s North, how can this initiative help Canada realize its vast potential?

Thierry Vandal: Global warming is not only affecting the North’s environment and communities; it is also creating new economic opportunities, such as the chance to develop Northern energy and mineral resources, and to use the Northwest Passage as an important shipping route. Consequently, there is growing interest from business and government in Canada’s North. But business, government, and Northern communities are realizing that there are not only opportunities but also major challenges that must be addressed if the North’s vast potential is to be realized.

The North’s current population and economy are small but could become much more important. The Northern economies are primarily dependent on their natural resources and public services. Their vast unexploited resources and the new economic opportunities that will be created by a changing climate could make the North one of the fastest growing Canadian economies, attracting skilled workers to this region. But the North will need significant infrastructure investments—and improved education, health, and social programs—in order to realize its economic development potential.

In that sense, the Centre for the North intends to provide insights on how Canada can best address the North’s challenges and tap into its Northern opportunities.

Global warming is not only affecting the North’s environment and communities; it is also creating new economic opportunities.

InsideEdge: How is Hydro-Québec dealing with the issues of an aging workforce and the prospects of labour shortages? What do you see as the roles of Aboriginal communities and workplace diversity in addressing worker shortages?

Thierry Vandal: More than 35 per cent of Hydro-Québec’s current workforce is 50 and over. By 2016, we will need to replace approximately 7,000 employees. For years now, we have been monitoring the situation. What are the sectors at risk, where are the vulnerabilities, where do we need to intervene? Our priority is to ensure that we transfer the knowledge and attract the skilled workers we will need to continue to grow the company. Our succession planning includes evaluation, feedback, and training, of course, but also recruiting strategies and competency management, with a special focus on managers and diversity.

The new workforce will mirror society as a whole. Today, this society is multicultural. Aboriginal communities are also a big presence where our hydro assets are located. Two of the keys are sustained education and role models in the Aboriginal world. Our workforce will become more diverse over time.

InsideEdge: Hydro-Québec’s experiences during the 1998 ice storm led to significant improvements in operations. What lessons can you share with other organizations to help them ensure the resilience of critical infrastructure?

Thierry Vandal: The 1998 ice storm was an exceptional weather event that made it into Canadian history books. The memory most of us at Hydro-Québec keep from those difficult circumstances is the extraordinary mobilization of all employees—night and day—to restore service as quickly as possible. That’s when you realize your company is really all about its employees.

That was 11 years ago. Since then, we have invested heavily to strengthen the distribution and transmission grids. We’ve further looped transmission and distribution grids in a number of areas. We’ve mechanically strengthened whole sections of the grids. Overall, $1.7 billion will have been invested. Emergency plans were also improved and updated.

The key lesson we’d share is to plan ahead. Make sure emergency response is well defined and deployed in your organization. Test your organization. We do it annually, with scenarios ranging from natural catastrophes to pandemics or cyber attacks on our infrastructure.

InsideEdge: From your position as Chair of The Conference Board of Canada, what do you see as the Board's role in building leadership for a better Canada?

Thierry Vandal: The Conference Board of Canada provides an independent, balanced voice on issues that matter to Canada’s leaders. I believe the quality of its work and the intelligence of its insights provide unique value. I feel privileged to work with the Conference Board’s senior management team and some of Canada’s most prominent leaders, who serve on the Board of Directors.

Thierry Vandal
Thierry Vandal
President and Chief Executive Officer, Hydro-Québec, and Chair of the Board of Directors, The Conference Board of Canada