Back to Main

Scenarios and Assumptions

Scenario Overview

EF2020 includes two core scenarios that explore potential outcomes for the Canadian energy system over the next 30 years. These scenarios are the Evolving Energy System Scenario (Evolving Scenario) and the Reference Energy System Scenario (Reference Scenario). These scenarios provide energy supply and demand projections that differ based the level of future action5 to reduce GHG emissions. The difference in the premise between these two scenarios impacts their specific assumptions – such as crude oil prices and renewable energy costs – which drive the supply and demand projections. EF2020 also includes a discussion of even greater climate action, in the “Towards Net-Zero” section. The “Towards Net-Zero” section does not provide a projection of the future, but rather a discussion of some of the key issues in transitioning towards a net-zero energy system.

The primary scenario in EF2020 is the Evolving Scenario. The core premise of the scenario is that action to reduce the GHG intensity of our energy system continues to increase at a pace similar to recent history, in both Canada and the world. This evolution implies less global demand for fossil fuels, and greater adoption of low carbon technologies. In contrast, the Reference Scenario assumes limited additional action to reduce GHGs beyond those policies in place today, implying higher demand for fossil fuels and less adoption of low carbon technologies. Consistent with these implications, in the Evolving Scenario we assume lower international prices for fossil fuels and a higher pace of technological change over the projection period, compared to the Reference Scenario.

EF2020 focuses primarily on the Evolving Scenario in order to provide a detailed exploration of the ongoing energy transition towards less carbon-intensive energy sources and technologies. Historically, there have been some important changes over long time periods in Canadian and global energy systems. Exploring a scenario where the energy system is assumed to evolve considerably is useful for a 30 year outlook to 2050. Allowing for continued change is a key feature of the Evolving Scenario. The Reference Scenario is a useful benchmark in illustrating a scenario with less assumed change.

Figure A.1 illustrates the key differences between the Evolving and References scenarios, and the Towards Net-Zero discussion. The vertical axis is a notional representation of the degree of action in GHG emission reduction. The horizontal axis is time, with the projection period starting in 2020.

Figure A.1: Conceptual Illustration of EF2020 Scenarios and a Net-Zero Future Figure A1 Conceptual Illustration of EF2020 Scenarios and a Net-Zero Future

This figure illustrates the key differences between the Evolving and References scenarios, and the Towards Net-Zero discussion. The vertical axis is a notional representation of the degree of action in GHG emission reduction. The horizontal axis is time, with the projection period starting in 2020. In the historical period, action is increasing, and in the projection period, the Evolving Scenario continues this increase at the historical rate. In the projection period, the Reference Scenario maintains action at 2020 levels, while in the Towards Net-Zero discussion, the pace of increase of action increases relative to history.

  • Towards Net-Zero
    The pace of action on addressing climate change increases from current levels.

  • Evolving Energy System Scenario
    Continues the historical trend of increasing action on climate change throughout the projection. Policies and agreements are strengthened after they sunset. Low carbon technologies continue to be developed.

  • Reference Energy System Scenario
    Climate change actions limited to only the measures that are currently in place. Technological development is modest, generally limited to those with existing momentum and/or market share.

  • History
    Gradually increasing action on climate change, including policies, regulations, and development of low carbon resources and technologies.

The upward sloping line from 2010 to 2020 in Figure A.1 represents the increasing level of action by governments, businesses, and citizens to reduce GHG emissions. This reflects that the breadth and stringency of federal, provincial, and municipal government climate policies have increased over this period. Likewise, a myriad of technologies which play a role in reducing GHG emissions, have steadily increased, improved, and become less expensive over the past decade

Over the projection period (2020-2050), the pace of action diverges in the Evolving and Reference Scenarios. Unlike the Evolving Scenario, the Reference Scenario continues current levels of action forward into the projection period. This implies that only policies in place at the time of analysis are included. This results in only modest improvements in already established technologies that produce and consume energy, and stronger global demand – and higher international prices - for fossil fuels. As a result, the Reference Scenario provides a baseline for discussing what the Canadian energy system might look like if there is limited future progress on reducing GHG emissions. Previous iterations of Canada’s Energy Future, going back to the 2007 Report, included a Reference Case. The framework underlying the Reference Scenario in EF2020 is conceptually similar to the Reference Case.

The Evolving Scenario provides a projection that reflects steady, continued progress towards reducing the GHG intensity of the energy system. It is not a pathway to a specific GHG emission reduction target. The assumptions in this scenario aim to provide an outlook where progress continues at roughly the same pace as in recent history. The Evolving Scenario includes a set of hypothetical future domestic climate policies to reflect greater ambition relative to the Reference Scenario. We describe the policies later in this section and in Appendix A. The Evolving Scenario also assumes a greater rate of technological progress relative to the Reference Scenario, with lower costs and greater efficiency of emerging technologies. Finally, we reflect weaker global demand for fossil fuels through lower assumed international prices for crude oil and natural gas compared to the Reference Scenario.

It is difficult to predict the policies that governments will put in place in the future. The future domestic policies included in the Evolving Scenario are entirely hypothetical and are not a recommendation, prediction, or evaluation of future policies that governments may choose to enact.

Together, the Evolving and Reference Scenarios provide a range of potential outcomes for Canada’s energy system over the next 30 years. As discussed in the “Results” section, neither scenario depicts the deep reductions in fossil fuel consumption that would be needed to achieve net-zero GHG emissions by 2050. Such a result would require an acceleration of policy and technology drivers relative to the pace in recent history. To explore what such an energy future might look like, EF2020 includes three segment-specific discussions. These discussions explore what net-zero emissions by 2050 could look like for three specific segments of the Canadian energy system. The “Towards Net-Zero” section describes the assumptions, trends, and uncertainties of these areas.

Back to Top

Evolving and Reference Scenario Assumptions

The EF2020 scenarios make a variety of assumptions about future trends that are necessary in making long-term projections. These include assumptions about domestic climate policies, rate of technological change, crude oil and natural gas markets (both domestic and global), major energy infrastructure, and future costs of new electricity generation capacity. Additional detail on the specific assumptions for each scenario follows.

The Energy Futures Scenarios in the Canadian Energy Information Landscape

EF2020 scenarios provide a broad perspective on the future of Canada’s energy system.

This analysis complements other important work in the area of understanding possible future energy trends. Environment and Climate Change Canada's (ECCC) GHG emission projections provide an accounting of the impact of current, and planned, policy initiatives on Canada’s emission outlook.

Various academic and institutional publications provide pathways to achieving stated climate objectives. Examples include the Trottier Energy Futures Project and the Deep Decarbonization Pathways Project. Many studies, from industry groups, researchers, academics, and institutions focus on specific aspects of Canada’s energy system. Further, several initiatives, such as the Stanford Energy Modeling Forum and the Canadian Energy Modeling Initiative, bring energy modelers together to examine a diverse range of future energy issues.

EF2020 is a Baseline for Discussion

It is important to note that the projections presented in EF2020 are a baseline for discussing Canada’s energy future today and do not represent the CER’s predictions of what will take place in the future. EF2020 projections are based on assumptions which allow for analysis of possible outcomes. Any assumptions made about current or future energy infrastructure, market developments, or climate policies, are hypothetical and have no bearing on any regulatory proceeding that is, or will be, before the CER.

Over the projection period, it is likely that developments beyond normal expectations, such as geopolitical events or technological breakthroughs, will occur. Also, new information will become available and trends, policies, and technologies will continue to evolve. This report is not an official, or definitive, impact analysis of any specific policy initiative, nor does it aim to show how specific goals, such as Canada’s climate targets, will be achieved.

  • Domestic Climate Policies

    Evolving: We assume a hypothetical suite of future policies, reflecting greater ambition relative to the Reference Scenario.

    Reference: We assume policies in place as of the summer of 2020 will continue. We also include various simplifying assumptions to reflect carbon pricing systems.

  • Technological Change

    Evolving: We assume lower costs, and greater efficiency of technologies aiming to reduce the GHG intensity of the energy system. This includes established technologies, such as wind and solar power, as well as the inclusion of some emerging technologies with limited commercial adoption today.

    Reference: We assume modest improvements in established technologies, and no adoption of emerging technologies.

  • Infrastructure and Markets

    In both scenarios, we base crude oil infrastructure assumptions on three announced projects, all with Federal approvals, and their completion dates in the short term. This analysis should not be taken as an endorsement of, or prediction about, any particular project. Rather, these assumptions are necessary for the analysis. For natural gas, both scenarios assume that natural gas infrastructure will be sufficient to prevent sustained large differentials between prices in western Canada and Henry Hub. Both scenarios assume gradually increasing levels of LNG exports. LNG exports are higher in the Reference Scenario compared to the Evolving Scenario. Given production and consumption projections, we assume markets for energy exports exist at the assumed prices.

  • Energy Prices

    We base crude oil and natural gas price assumptions on a consensus view of other forecasting agencies, as well as CER analysis. Prices are lower in the Evolving Scenario compared to the Reference Scenario. This accounts for lower global demand for fossil fuels in a scenario with greater action to reduce GHG emissions and a greater pace of technological change.

  • Goals and Targets

    We do not explicitly model climate and other related goals and targets in either scenario.

  • COVID-19 Recovery

    Evolving: We assume the main impacts of the COVID-19 pandemic are felt in 2020, and there is gradual economic recovery in the next two to three years. Reduced travel, influenced by continued working at home, as well as increased effectiveness and reliance on digital communication, continues to put downward pressure on oil demand and prices during the recovery period. These trends eventually intersect with the key drivers of the Evolving Scenario: continued advancements in low carbon energy technologies and expansion of climate policy.

    Reference: We assume there will be gradual economic recovery in the near term, and that economic growth and energy markets return to pre-pandemic business-as-usual by 2025.

Back to Top

Domestic Climate Policy

The Evolving Scenario begins with domestic climate policies currently in place. It then builds on the current policy framework with a hypothetical suite of future policy developments. These policies are chosen to reflect increasing ambition to reduce GHG emissions, and generally align with the broad trends of historical progress. Alternatively, the Reference Scenario only includes policies that are currently in place. This section outlines specific policies included in detail.

Current policies:

The Reference Scenario includes only current policies. In the Evolving Scenario, current policies provide a baseline that is built upon over the projection.

In order to determine whether to include a policy in the analysis, the following criteria were applied:

  • The policy was publically announced prior to 1 August 2020.

  • Sufficient details exist to model the policy.6

  • Goals and targets, including Canada’s international climate targets, are not explicitly modelled. Rather, policies that are announced, and in place, to address those targets are included in the modelling and analysis.

Table A.1: Overview of Domestic Policy Assumptions

Key Current Policy Assumptions

Current policies are the base for policy assumptions in the Evolving Scenario. The Reference Scenario only includes current policies.

Key Future Policy Assumptions

Future policy assumptions are hypothetical increases in policy stringency. They are only included in the Evolving Scenario.

Carbon Pricing

Current provincial and territorial systems, as well as the Federal Carbon Pricing Backstop.

Rising cost of Carbon Emissions

  • Carbon prices continue to rise beyond 2022, to $125 in 2019 real terms by 2050.
  • Credits for large emitters are gradually reduced over the projection period.

Coal Phase Out

Traditional coal-fired generation is phased out of electricity generation by 2030.

Reduced Emission Intensity of End-Uses

  • Energy Efficiency Regulations: Gradually stronger energy efficiency regulations across the economy, including net-zero ready building codes, improving appliance standards, and increasing light-duty vehicle efficiency standards.
  • Low Carbon/Clean Fuel Standard: Average emission intensities of fuels are gradually reduced over the projection period through increased use of renewables, end-use switching, and upstream emission reductions.
  • ZEV Mandates: Requirements for ZEV's in new sales are gradually introduced and/or increased over the outlook period.

Energy Efficiency

Currently in place regulations including appliance standards, building codes, and vehicle standards.

Electric Vehicles

Provincial policies and initiatives including those in B.C. and Quebec, as well as Federal rebates and infrastructure program.

Support for Clean Energy Technology and Infrastructure

Policy continues to support new technology development as well as key infrastructure developments including electric transmission, carbon capture and storage, and electric vehicle charging infrastructure.

Renewable Energy

Current requirements for renewable electricity, and blending of ethanol, biodiesel and renewable natural gas.

Future policies:

The Evolving Scenario adds a hypothetical suite of future policy developments to current policies. These policy assumptions take into account several considerations:

  • Announced policies that are currently in the development stage (such as those included in Environment and Climate Change Canada’s (ECCC) “With Additional Measures” GHG scenarios) are included to the extent possible. Generally their inclusion requires simplifying assumptions, as final regulations are not available.

  • Some policies that are being increasingly enacted by various jurisdictions are broadened to others later in the projection period. For example, over the past several years, zero emission vehicle (ZEV) mandate regulations have been implemented in Quebec and B.C., as well as several U.S. states. The Evolving Scenario assumes hypothetical minimum ZEV mandate implementation across all Canadian provinces.

  • Some hypothetical policies are included that supplement existing policy frameworks. For example, as described in Table A.1, we include a hypothetical carbon price that increases steadily over time in the Evolving Scenario in addition to the Federal Backstop carbon price.

Table A.1 describes specific policy initiatives. Figure A.2 compares the federal backstop carbon price to the increasing cost of carbon pollution in the Evolving Scenario. Additional policy detail is available in Appendix A.

Figure A.2: Current Federal Backstop Carbon Pricing Schedule7 and Evolving Scenario Economy-wide Carbon Pricing Figure A2 Current Federal Backstop Carbon Pricing Schedule

This figure compares the federal backstop carbon price to the increasing cost of carbon pollution in the Evolving Scenario, in 2019 C$$ per tonne. The Federal backstop price increases until 2022, where it is fixed at $50 nominal C$ per tonne, so when adjusted for inflation in this chart declines steadily to $25 2019 C$ per tonne in 2050. The increased cost of carbon pollution in the Evolving Scenario, measured in 2019 C$ per tonne, increases to $60 in 2030, $75 in 2040, and $125 in 2050.

Back to Top


Technological changes can have large impacts on energy systems. There is a strong link between policies and the pace of technological development – policy frameworks are key drivers of technological innovation and greater use of GHG reducing technologies. Over the past decade, technological advancements have unlocked unconventional fossil fuel resources and dramatically reduced the cost of technologies like wind, solar, and batteries. The Evolving Scenario assumes substantial technological progress, including adoption of many promising technologies currently in the early stages of commercialization, in the latter half of the projection period. Alternatively, the Reference Scenario assumes only moderate technological progress, including incremental efficiency improvements and cost reductions for well-established technologies.

Emerging Technologies Included in the Evolving Scenario

The Evolving Scenario allows for penetration of new technologies over the 30 year projection period. This list below includes several assumptions about the adoption of technologies that currently have limited adoption, but that could make significant impacts in the future. The pace of technological development, as well as how it interacts with policy, market, and social dynamics is a key uncertainty. Adoption of these and other emerging technologies could be faster or slower than the Evolving Scenario assumes:

  • Utility scale battery storage: Approximately 3 GW by 2050.

  • Solvent-assisted oil sands extraction: New projects and expansions post-2025 utilize solvent-assisted methods.

  • Digitisation and sector coupling: Increased EVs and electrification in buildings.

  • Low carbon hydrogen use for freight and industrial applications: Gradually adopted in the latter half of the projection period, varying by sector and province. Hydrogen powered freight meets 2% of trucking needs by 2040 and 12% by 2050, largely for heavy duty trucking.

  • Freight electrification: Electric trucks provide 3% of freight trucking needs by 2040 and 14% by 2050, largely in light and mid-duty trucking.

  • Carbon capture use and storage: An additional 15 megatonne (MT) per year sequestered by 2040, 30 MT per year by 2050, beyond existing projects.

  • Small modular reactors: Addition of some small pilot projects from 2035-2040, gradually increasing in the 2040s to installed capacity of 500 MW by 2050.

Back to Top

Crude Oil and Natural Gas Markets and Infrastructure

International crude oil and natural gas prices are a key driver of the Canadian energy system and are determined by supply and demand factors beyond Canada’s borders. Canadian crude oil and natural gas benchmark prices (such as Western Canada Select (WCS) for heavy crude oil and Nova Inventory Transfer (NIT) for natural gas) are driven by international trends, but are also driven by local factors, such as local crude quality and export pipeline capacity constraints.8

The COVID-19 pandemic is a key driver of current energy market dynamics. This is particularly true for crude oil. Figure A.3 shows the EF2020 crude oil assumptions for Brent, the primary global benchmark price for crude oil, for both the Evolving and Reference Scenarios. Prices decreased drastically early in 2020 because of lower demand for transportation fuels in response to the COVID-19 pandemic. In both scenarios, we assume prices begin to gradually increase over the next several years. In the Evolving Scenario, the increase is limited as behavioral and technological changes associated with the pandemic (less international travel and increased remote work) continue to depress global crude oil demand. These dynamics maintain a competitive global crude oil market, which keeps prices near recent average levels. In the longer term, increased global action on climate change, which reduces demand for crude oil, puts downward pressure on prices relative to the Reference Scenario. In the Evolving Scenario, the Brent price peaks at 2019 US$55 before declining to $50 by the end of the projection period. In the Reference Scenario, crude oil prices rise to 2019 US$75/bbl for the majority of the projection period. In both scenarios, WTI, a key North American crude benchmark, is 2019 US$4.00 lower than Brent in the long term.

Table A.2: Announced Crude Oil Capacity Additions
Line 3
Keystone XL Trans Mountain Expansion
Announced in-service date 2019 2023 2022
Expected date at full capacity 2021 2023 2023
Full capacity (Mb/d) 370 830 540

Both EF2020 scenarios assume that the Canadian heavy benchmark price is discounted to WTI at a level consistent with the historical average. The WTI-WCS differential is 2019 US$12.50 for most of the projection. Both the Evolving and Reference Scenarios assume that additional pipeline capacity will become available in western Canada in the early 2020s, based on announced online dates for Enbridge’s Line 3 Replacement Project, the Trans Mountain Expansion (TMX), and Keystone XL.

The assumed capacities and in-service dates of additions to existing systems are as announced by the operators of those pipelines. Likewise, the capacity and timing of the three pipelines included in Table A.2 are as per the announcements of the operators.9

Figure A.3: Brent Crude Oil Price Assumptions to 2050, Evolving and Reference Scenarios Figure A3 Brent Crude Oil Price Assumptions to 2050, Evolving and Reference Scenarios

This figure shows Brent crude oil price assumptions in 2019 US$ per barrel from 2015 to 2050 for both scenarios. The Reference Scenario recovers from 2020 faster than the Evolving Scenario, and remains at $75 for most of the projection. The Evolving Scenario price range plateaus around $55 from 2025-2035, and then begins to gradually decline.

Figure A.4 shows the EF2020 natural gas price assumptions for the Evolving and Reference scenarios. Henry Hub, a key North American benchmark price, declines in 2020 in response to the COVID-19 pandemic, although to a lesser extent than oil. Western Canada Sedimentary Basin (WCSB) gas prices began to rebound late in 2019 and remain higher than recent lows, despite a well-supplied market. An assumed rising long-term price in both scenarios balances the market as demands for North American natural gas increase. Over the projection period, the Henry Hub price is assumed to increase gradually, reaching 2019 US$3.75 by 2040 in the Evolving Scenario. In the Reference Scenario, natural gas prices are assumed to rise faster, reaching 2019 US$4.25 by 2050, consistent with greater North American demand growth and LNG exports than in the Evolving Scenario.

Figure A.4: Henry Hub Natural Gas Price Assumptions to 2050, Evolving and Reference Scenarios Figure A4

This figure shows Henry Hub natural gas price assumptions in 2019 US$ per MMBtu from 2015 to 2050 for both scenarios. Both scenarios gradually increase for much of the projection period. The Evolving Scenario reaches $3.75/MMBtu by 2050, while the Reference Scenario increases to $4.25/MMBtu.

Factors Currently Affecting Oil Markets:

  • Global crude oil supply and demand.

  • Pace and extent of COVID-19 recovery.

  • Incremental pipeline and rail capacity in western Canada.

  • Government regulations.

  • Increased environmental, social, and governance (ESG) considerations.

A Global Evolving Energy System

In EF2020, we focus on Canada’s energy system. However, global dynamics critically influence how technology and energy market trends evolve over the projection period. The assumptions discussed in this section provide a link to this global context, particularly benchmark price and technology cost assumptions. The Evolving Scenario considers the impact of continuing the historical trend of increasing global action on climate change.

Accordingly, on the basis that global policy and technology developments will constrain demand for fossil fuels, we assume lower benchmark prices for crude oil and natural gas in the Evolving Scenario. Similarly, on the basis of greater global adoption of emerging technologies, such as EVs, battery storage, and renewable electricity, we assume continued cost declines and efficiency gains for those technologies.

EF2020 assumes a narrowing differential between western Canadian and U.S. natural gas prices in the short term. This is consistent with the recent increased NIT prices. Several projects have recently come online, and additional pipeline expansions are planned for the Nova Gas Transmission Ltd. (NGTL) System, as well as Enbridge’s BC Pipeline. Over the long term, the Henry Hub-NIT differential remains around 2019 US$0.90/million British thermal units (MMBtu).

EF2020 assumes LNG export volumes from Canada as shown in Figure A.5. These volumes include Phase 1 of the LNG Canada project, which has a final investment decision and is currently under construction. They also include an assumption of additional volumes that are not specific to a particular project. The Reference Scenario assumes greater LNG exports than in the Evolving Scenario beginning in 2039. Future LNG development is uncertain and could be significantly different than these assumptions. For both scenarios, we assume that 75% of LNG feedstock will come from natural gas production dedicated to supplying LNG facilities.

Figure A.5: Canadian LNG Export Volume Assumptions to 2050, Evolving and Reference Scenarios Figure A5 Canadian LNG Export Volume Assumptions to 2050, Evolving and Reference Scenarios

This figure shows LNG export volume assumptions for both scenarios, 2020 to 2050, measured in Bcf/d. Assumed exports in both scenarios reach 3.7 Bcf/d in the mid-2030s. In the latter half of the projection, Evolving Scenario exports increase to 4.9 Bcf/d, while Reference Scenario exports increase to 7.1 Bcf/d.

Factors Currently Affecting Natural Gas Markets:

  • Increased North American production.

  • U.S. LNG exports.

  • WCSB and export pipeline capacity.

  • Oil sands demand for natural gas and condensate.

  • Potential Canadian LNG and liquefied petroleum gas (LPG) exports.

  • Increased ESG considerations.

Back to Top


The analysis in EF2020 reflects current utility and system operator expectations of future electricity developments in their respective regions, especially for major planned projects. We also make assumptions on the cost to add new electricity generating capacity in the future. Table A.2 shows assumptions for natural gas, solar, and wind costs, including their capacity factors. Current schedules and plans from utilities, companies, and system operators are the primary basis for the timing and magnitude of other forms of generation added over the projection period (such as hydroelectric and nuclear refurbishments).

As discussed earlier in this section, costs for wind, solar, and other emerging technologies are lower in the Evolving Scenario than the Reference Scenario. This assumes a stronger global shift towards these low carbon technologies, and that advancements and efficiencies continue to lower their costs and improve their performance.

Figure A.6 shows assumed average levelized costs of onshore wind and utility scale solar for the Evolving and Reference scenarios. The levelized cost includes all project costs over its lifetime (operating, fuel, financing, capital costs etc.) along with assumptions about capacity factor and project life. The ranges around the wind and solar figures highlight the variability, and importance of these other factors, in determining the ultimate cost of the resources.

Table A.3: Electricity Cost Assumptions for Natural Gas, Onshore Wind, and Utility Scale Solar to 2050, Evolving and Reference Scenarios
Capital Cost (2019 US$/
kilowatt (kW))
Fixed Operating and Maintenance Costs (2019 US$/kW) Variable Operating and Maintenance Costs (2019 US$/
megawatt hour(MW.h))
Factor (%)10
Gas (Combined Cycle) 1 100-1 450 16 4 70
Gas Peaking 800-1 100 14 4 20
Wind (2020) 1 036 20-45 0 35-50
Solar (2020) 1 131 16-20 0 10-20
Wind (2030) 877 20-45 0 35-50
Wind (2040) 705 20-45 0 35-50
Wind (2050) 562 20-45 0 35-50
Solar (2030) 765 16-20 0 10-20
Solar (2040) 491 16-20 0 10-20
Solar (2050) 313 16-20 0 10-20
Wind (2030) 1 020 20-45 0 35-50
Wind (2040) 998 20-45 0 35-50
Wind (2050) 936 20-45 0 35-50
Solar (2030) 887 16-20 0 10-20
Solar (2040) 650 16-20 0 10-20
Solar (2050) 470 16-20 0 10-20
Figure A.6: Wind and Solar Capital Costs and Levelized Cost11
Assumptions to 2050, Evolving Scenario
Figure A6 Wind and Solar Capital Costs and Levelized Cost
Figure A.6: Wind and Solar Capital Costs and Levelized Cost11
Assumptions to 2050, Evolving Scenario
Figure A6 Wind and Solar Capital Costs and Levelized Cost

This graph shows the ranges of wind and solar capital and levelized costs from 2017 to 2050 in the Evolving Scenario. In 2019, the average wind and solar capital costs were 1113 and 1236 $2019 US$/Kw, respectively. By 2050 the average capital costs fall to 563 and 313 $2019 US$/Kw, respectively.

In 2019, the average wind and solar levelized costs of electricity were 32 and 61 $2019 US$/MW.h, respectively. By 2050 the average levelized costs fall to 21 and 19 $2019 US$/MW.h, respectively.

Factors Currently Affecting Electricity Markets:

  • Moderate electricity demand growth in Canada and U.S.

  • Pace and nature of COVID-19 recovery and impact on electricity demand.

  • Electricity pricing in export markets.

  • Federal and regional climate policies such as coal retirement and carbon pricing systems.

  • Decline in cost for non-hydro renewables, particularly for solar and wind technologies.

  • Aging infrastructure and reliance on diesel in remote communities.

Back to Top
  • [5] “Action” in this context is led by increasing policies, while also considering behavioural decisions by consumers and firms.
  • [6] For example, the proposed Clean Fuel Standard has been announced, but is not included as regulations are currently under development.
  • [7] For illustration purposes: In the EF2020 analysis, carbon prices are modeled based on individual provincial and territorial systems, many of which differ from the federal backstop system. The Federal Backstop price includes the announced increase to $50/tonne by 2022 in nominal terms. For the remainder of the Reference Scenario projection, this is held constant, and the price in inflation-adjusted terms declines by the rate of inflation.
  • [8] Full benchmark price assumption data is available in the accompanying data appendices, described in the “Access and Explore Energy Futures Data” section.
  • [9] In the case of Trans Mountain, the portion of pipeline capacity that is typically used to transport RPPs, 50 Mb/d, has been removed from that pipeline’s available capacity. Likewise, 50 Mb/d has also been removed from the future capacity of TMX.
  • [10] Capacity factors are the actual energy produced by a generator divided by the maximum possible generation over a given period.
  • [11] The range around the capital costs is +/- 20%, which reflects the variability across different estimates of current, and future, wind and solar costs. Costs and performance characteristics can vary across regions and time. The ranges around the levelized costs include the variation in capital costs shown in the figure, ranges in other costs and capacity factors shown in Table A.2, as well as higher and lower project financing costs.

Notice: On 2 December 2020, a note for additional clarity was added to Figures ES.8 and R.12 in this PDF.

Date modified: