New CER report shows that policy and technology change will be key drivers of Canada’s energy transition

News Release
For Immediate Release

November 24, 2020 – Calgary, AB – Canada Energy Regulator

A new energy outlook from the Canada Energy Regulator (CER) finds that Canada’s fossil fuel consumption declines over the next 30 years but without an accelerated energy transition, fossil fuels will still make up more than 60 per cent of Canada’s fuel mix in 2050.

Canada’s Energy Future 2020: Energy Supply and Demand Projections to 2050 explores how new technologies and climate policy will impact Canadian energy consumption and production trends over the next 30 years. The outlook considers two scenarios with different rates of technological and government policy change: the Evolving Energy System Scenario and the Reference Energy System Scenario.

Under the Evolving Scenario, Canada’s domestic fossil fuel consumption has already peaked and will be 35 per cent lower by 2050. At the same time, renewables and nuclear become a larger share of Canada’s energy mix with electricity playing a greater role in satisfying end use energy needs. Electricity will become increasingly competitive with fossil fuels in many parts of the energy system, including for passenger vehicles.

Moderate growth in crude oil and natural gas production continues until it peaks around 2040. Canada’s major crude oil pipeline projects currently under construction will be able to accommodate expected future production growth over the next two decades.

Achieving net-zero greenhouse gases (GHG) emissions in Canada within the next 30 years will require stronger policies and greater adoption of low-carbon technologies. Canadian and international efforts to reduce GHG emissions will be a critical factor in how energy systems evolve in the long term.

The COVID-19 pandemic continues to significantly impact Canada’s energy system. Canada’s economic recovery is a significant unknown facing the energy sector for the near-term, and one of many uncertainties for the long term.

The CER produces neutral and fact-based energy analysis to inform the energy conversation in Canada. Together with Ingenium, the CER has developed educational activities for students and educators to explore Canada’s energy ecosystem over the long term based on Canada’s projected energy demand.

This publicly available report looks at long-term Canadian energy supply and demand outlook covering energy commodities across all provinces and territories. The CER will continue to publish informative products that are beneficial to a diverse audience, and reflect Canada’s diversity of relevant energy issues in an engaging and transparent way.

Report highlights

  • Energy use in 2020 will fall by six per cent because of the COVID-19 pandemic, while crude oil production will decrease by seven per cent or 335 thousand barrels per day (Mb/d) compared to 2019.

Results from the Evolving Energy System Scenario

  • Total renewable and nuclear demand across the energy system grows by 31 per cent by 2050 and becomes a larger share of the energy mix. In 2050, 90 per cent of electricity generation comes from renewable and nuclear generation compared to 81 per cent today.
  • Fossil fuel consumption peaked in 2019. By 2030, fossil fuel consumption is 12 per cent lower and 35 per cent lower by 2050. Coal declines in the 2020s as it is phased out of electric generation.
  • Crude oil production grows from 4.9 MMb/d in 2019 to 5.8 MMb/d in 2039 where it peaks and then declines in the last decade of the projection to 5.3 MMb/d by 2050. Growth is largely due to expansions of existing in situ oil sands projects.
  • Natural gas production increases from 15.7 Bcf/d in 2019 to its peak of 18.4 Bcf/d in 2040. This growth is driven by increasing LNG exports, which increase to 4.9 Bcf/d by 2039. After 2040, natural gas production slowly declines to 16.8 Bcf/d by 2050.
  • Total demand for renewable energy sources such as hydroelectricity, wind, solar, and biofuels increases by 45 per cent from 2019 to 2050.
  • Electricity’s share of end-use demand increases by an average of one per cent per year from 2019 to 2050 or approximately 16 per cent currently to over 27 per cent in 2050 when half of all passenger vehicles sales are electric vehicles.  

Results from the Reference Energy System Scenario

  • Fossil fuel consumption is relatively unchanged throughout the projection period due to steady improvements in energy efficiency offsetting population growth and increasing industrial output, particularly in the oil sands.
  • Significantly higher assumed crude oil prices, greater volumes of assumed LNG exports, moderately higher natural gas prices, and a lack of additional domestic climate policies beyond those currently in place drive higher future production for both crude oil and natural gas.
  • In 2050, natural gas plays a larger role in the electricity mix, and renewable and nuclear generation account for 81 per cent of generation (the same share as today).
  • Electricity's share of end-use demand grows more slowly and reaches 20 per cent in 2050, when 20 per cent of passenger vehicles sold are EVs. Renewable generation also grows in the Reference Scenario, although at a slower pace.

Quotes

“With the increasing pace of change in Canadian and global energy markets and climate policy, the need for up-to-date analysis on energy trends is greater than ever. Canada’s Energy Future series provides Canadians with a key reference point for discussing our country’s energy future and identifies key drivers of change that will impact Canada’s energy transition.”

Gitane De Silva
Chief Executive Officer
Canada Energy Regulator

“Canada’s Energy Future 2020 marks an important inflection point, as Canada’s energy system is being shaped by COVID‑19 and ongoing innovations in energy technology and climate policy. In our Evolving Scenario, we now project that Canada has passed its peak for fossil fuel consumption and total energy demand.”

Darren Christie
Chief Economist
Canada Energy Regulator

Associated Links

The Canada Energy Regulator (CER) works to keep energy moving safely across the country. We review energy development projects and share energy information, all while enforcing some of the strictest safety and environmental standards in the world. To find out how the CER is working for you visit us online or connect on social media.

Contacts

Karen Ryhorchuk
Communications Officer
Canada Energy Regulator
Email: media@cer-rec.gc.ca
Telephone: 403-671-9756
Telephone: 403-292-4800
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5503
Facsimile (toll free): 1-877-288-8803

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