Since 2005, Canada’s electricity sector has undergone changes that have resulted in significant emissions reductions. Recognizing the importance of clean electricity for enabling economy-wide emissions reductions—and moving in concert with major trade partners like the United States—the federal government has committed to achieving net zero in the electricity sector by 2035. Historical data on electricity generation shows that Canada is trending in the right direction, but wind and solar generation need to amp up to keep Canada on track to reach its climate targets.
Figure 1: Canada’s grid is becoming cleaner, as annual electricity generation between 2005-2021 shows a declining share of electricity generated from fossil fuels and a growing share from wind and solar.
While electricity generation has remained relatively constant at around 600,000 GWh annually, emissions have significantly decreased. Electricity is increasingly generated from cleaner sources, and annual electricity generation from fossil fuels has been falling, decreasing from 154,004 GWh in 2005 to 122,734 GWh in 2021.
This decrease is in part due to both federal and provincial policy drivers aimed specifically at phasing out coal-fired electricity by 2030, which have shrunk coal generation in Canada to nearly a third of what it was in 2005. Some provinces plan to phase out coal this year, and some already have—including Ontario, which has been coal-free since 2014. In most cases, natural gas has replaced coal, as electricity generated from natural gas rose from 33,879 GWh in 2005 to 74,497 GWh in 2021. However, the forthcoming Clean Electricity Regulations will require a further phase-down of unabated gas-fired generation to meet 2035 net zero electricity targets.
Meeting this goal and enabling Canada’s broader net zero transition will require transitioning away from natural gas and ramping up the use of non-emitting generation, especially wind and solar. To date, Canada has largely relied on hydro and nuclear to generate clean electricity—accounting for a steady 75 per cent of Canada’s total annual electricity generation since 2005. Wind and solar are playing a growing role across Canada, expanding from just less than one per cent of total electricity generated in 2005 to almost 5.9 per cent of total electricity generated in 2021. Electricity generation from wind and solar has also grown across all provinces and territories—even in Alberta and Nova Scotia, provinces that have historically relied heavily on fossil fuels for electricity generation. This trend toward wind and solar needs to continue if Canada is going to clean up its electricity sector. Fortunately, the role of solar and wind is expected to increase significantly as their costs continue to fall and the demand for clean electricity continues to grow.
All these figures point to a positive trend for decarbonizing the electricity sector, but it has a long way to go to reaching net zero emissions by 2035. If implemented effectively, the Clean Electricity Regulations will accelerate the transition to cleaner sources such as wind and solar. But as demand for clean electricity increases on the path to net zero, electricity systems must also become bigger and smarter (or more flexible). Stay tuned for future insights exploring these dimensions in more detail.