Building to 2035

State of the Canadian Electricity Industry 2022 Accelerate Net Zero

Theme 1 More and Faster: Getting to a Net Zero Grid

Canadian Electricity Generation By Source, 2020

MWh

Hydro Nuclear Combustibles Wind 19%

15% 6%

60%

“Electric power generation, monthly generation by type of electricity”, Statistics Canada, February 7, 2022, https://www150.statcan.gc.ca/ t1/tbl1/en/tv.action?pid=2510001501.

In previous years, Electricity Canada’s State of the Industry has looked at measures needed to build a grid to meet Canada’s economy-wide 2050 Net Zero commitment. With the new federal commitment to a Net Zero electricity system by 2035, this year’s focus will be on this challenging nearer term target.

Canada starts from a stronger position than most countries. We already have one of the cleanest electricity grids in the world. More than 80 percent of the power produced domestically is from non-emitting sources. Of that, approximately, sixty percentage points is from hydropower; nuclear is next with 15 percent percentage points; and wind represents most of the rest.4

This is a clean energy advantage matched by few other countries. In the United States, where two-thirds5 of electricity is supplied by coal or natural gas, states such as New York and Massachusetts are leaning on clean Canadian power to decarbonize. Minnesota and Manitoba have struck a deal to essentially use Manitoba’s hydro reservoirs as a giant battery for Minnesota’s surplus wind.

But a strong start does not take away from the challenges of the path ahead. Adding new capacity to replace existing fossil fuel power plants (less than 20 percent of energy) will be much more challenging given regional diversity and current transmission interconnections. In several eastern provinces, the Prairie provinces and various remote communities across Canada, fossil fuel generation plays an critical role in providing baseload electricity.

Thus, building a Net Zero electricity grid will be a national challenge with significantly different regional criticality. Fossil fuels still play a key role in some provincial grids, which are already comparatively clean. Though only a small faction of total electricity generation in that province, Ontario produces more electricity from emitting sources (13.2 TWh) than all of Atlantic Canada (12.7 TWh). Natural gas will remain important over the remainder of the decade, as Ontario’s nuclear fleet experiences retirements and refurbishments.

Based on current loads, Canada will need to replace more than 121 TWh per year of carbon-emitting electricity to reach a non-emitting grid. But building to replace current loads will not be anywhere near sufficient. As noted previously, decarbonization will mean actual electricity demand will grow dramatically in the coming years by a factor of two or three as other sectors are electrified.