Canada Energy Regulator warns of rising electricity demand, LNG dependence

CALGARY — Surging electricity demand and rapid domestic expansion of renewables are reshaping Canada’s energy system, while expanding natural gas production and potential production gains for oil could strengthen the country’s footprint in global markets, according to the national energy regulator.In a new report released Tuesday by the Canada Energy Regulator (CER), four long-term scenarios — Current Measures, Higher, Lower, and Canada Net-Zero — were laid out to illustrate how the country’s energy mix could evolve over the next 25 years.The CER projects that electricity consumption will sharply climb across the country — rising roughly 44% between 2023 and 2050 as homes, industry, and emerging technologies such as artificial intelligence (AI) increasingly rely on the grid..Meanwhile, the capacity of the country’s electricity system is projected to double from 160 gigawatts in 2023 to 310 gigawatts in 2050, with more than 96% of generation projected to come from non- or low-emitting sources by then."While the largest incremental source of generation is wind energy, we also see a rise in solar, and these variable power sources are supported by higher generation from more stable and dispatchable sources including hydroelectricity, nuclear, and natural gas," CER’s chief economist Darren Christie said."We also see power lines between provinces play a growing role in balancing the variations in electricity supply and demand," said Christie, as total interprovincial transmission capacity is projected to increase by roughly 70%.Natural gas production is expected to expand steadily in all scenarios, reaching between 21 and 32 billion cubic feet per day (Bcf/d) over the next 25 years, up from approximately 19 Bcf/d in 2025..However, that projected growth will hinge on liquefied natural gas (LNG) exports and whether Canada can reach markets beyond the US, with roughly a quarter of Canada’s total gas production projected to be tied to LNG by 2050.Depending on global market conditions, crude oil presents a more mixed long-term outlook, as production could decline by 12% or grow by as much as 18% by 2050.The report finds that even in higher-production scenarios, Canada’s export patterns will remain relatively unchanged, as most oil exports would continue flowing to the US if existing pipeline infrastructure is used much as it is today.."The results remind us that Canada's energy future isn't fixed. Electricity is poised to play a much larger role, natural gas outcomes are shaped by LNG, and crude oil trade remains closely tied to the US if pipeline usage is much like today's,” Christie stated.In most of the CER’s projected scenarios, Ontario and Quebec are set to remain reliant on crude oil and natural gas sourced from or transported through the US under current pipeline configurations.“We see the prospect of Central Canada continuing to need crude oil and natural gas produced by or transported through the US,” Christie said.However, regional energy self-sufficiency in those regions could improve in the Canada Net-Zero scenario, with lower fossil fuel consumption and higher use of domestically produced resources like electricity and hydrogen.Across all four scenarios, Canada’s greenhouse gas emissions decline, driven largely by a cleaner electricity grid and emission reductions in most economic sectors.However, the report finds emissions plateau around 2035 under current policies and says that Canada reaching net-zero by 2050 would require an “economy-wide transformation” toward low-carbon technologies and stronger green policies.

Canada Energy Regulator warns of rising electricity demand, LNG dependence

Related Stories