Canada’s Energy Future 2026 – Electricity Model

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What does the model do and how does it work?

The Electricity model simulates how future electricity demand could be met. The Electricity model, PyPSA-Can, is developed by CER staff based on the Python for Power System Analysis (PyPSA) model, an open-source electric power system planning and simulation model. It models electricity generating and storage units, electricity transmission infrastructure, energy resource availability, electricity demand, and applicable regulations. The model simulates the operation of electric power systems at hourly intervals.

The model has two main components to simulate electricity supply:

• The investment planning module considers the electricity demand projections in each region and adds electricity generation, storage, and transmission infrastructure as required. The current model adds generation and storage investments annually and inter-provincial transmission infrastructure in five-year intervals within the outlook period. To add infrastructure, the investment model considers possible new infrastructure and adds those that minimize the total system costs over the projection period. Total system costs include the initial costs (i.e., capital cost) and operating costs.
• The operating module will deploy the electricity supply resources up to their available potential in ascending order of operating cost until demand is met, taking into account the operational characteristics of those resources. The operating cost of electricity supply resources depends on corresponding fuel prices, variable operating costs, operating efficiencies (i.e., the amount of fuel required to produce a unit of electricity), and policies and regulations.

Additional information about PyPSA is available.

Figure E.1: Electricity model overview

Source and Text Alternative

Source: CER

Text Alternative: The infographic displays a simplified version of how the Electricity model works. The goal of the model is to find the least cost way to meet electricity demand. The model finds the optimal fuel mix in each projection year to meet demand, including costs, prices, and emission generation. It also finds the best generating unit type and location for each province or territory’s individual needs, subject to geographic constraints and resource limits. A map of Canada displays inter-provincial and international transmission corridors. The corridors connect to regional nodes aligned with, where applicable,the distinct provincial and territorial power systems in Canada

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What level of detail does the model cover?

• Regions: The model produces projections of electricity capacity, generation, and trade (where applicable) for each of Canada’s 10 provinces and 3 territories.
• Timestep: The model solves hourly for each year of the projection period. Future investments, from the investment planning module, are optimized over annual increments.
• Facility detail: All provincial electricity generation units above 1 MW, as well as all territorial units, are represented at the facility level.
• Generating technologies: The model includes over 63 electricity generating technologies, as well as 10 storage technologies. Each technology has a detailed cost and performance profile including capital costs, operating costs, fuel use, heat rate, and output potential.
• Transmission: Transmission between provinces and the U.S. is as depicted in Figure E.1.

What are the key inputs and outputs of the model?

Table E.1: Key inputs to the Electricity model

Key inputs to the Electricity model

Input	Source and description Values in bold refer to an input that comes from another section of the Energy Futures Modeling System (Figure MS.1).
Electricity demand	Hourly end-use electricity demand is obtained from the Energy Demand and Emissions model, as is annual electricity demand to operate direct air capture facilities. Electrolysis hydrogen production demand is obtained from the Hydrogen model.
Fuel prices	Input fuel prices are consistent with a scenario’s assumptions (and used in the Energy Demand and Emissions Model), as well as cost trends from the, Bioenergy model, and the Hydrogen model.
Policies	Canadian climate and energy policies are Assumptions. These can vary by scenario (See Appendix 1 in Canada’s Energy Future 2026 for details).
Technology characteristics	Technology characteristics, such as costs and efficiency, are Assumptions. The values are based on various publicly available sources and modified based on assumptions and Macroeconomic projections, to reflect the Canadian energy economy. The values vary by scenario (See Appendix 2 in Canada’s Energy Future 2026 for details and references).
Reliability constraints	These are assumptions based on engineering requirements published by the North American Electric Reliability Corporation (NERC) and provincial and territorial utilities.
Cogeneration	Cogeneration operational limits are set in two ways depending on the asset: 1) assumptions based on observed historical behaviour and 2) operational limits that align with cogeneration operations in the oil sands module of the Crude Oil model.
Resource availability	Resource availability estimates for wind and solar energy are based on European Centre for Medium-Range Weather Forecasts Reanalysis data version 5 (ERA5) weather data and is further processed through CER variable renewable models. Resource availability data for bioenergy is from the Bioenergy model. Other resource data is collected from various publicly available sources, as needed.

Table E.2: Key outputs from the Electricity model

Key outputs from the Electricity model

Output	Description and linkages with other models in the Energy Futures Modeling System Values in bold refer to an output that is a key input to another model in the Energy Futures Modeling System.
Electricity capacity & generation	Installed electricity capacity and generation by province and territory, by projection year, and by technology. Projections are available in the Canada’s Energy Future dataset.
Transmission capacity and utilization	Interprovincial transmission capacity by transmission corridor and electricity interchanges at annual resolution. Projections are available in the Canada’s Energy Future dataset.
Electricity costs	Average cost of power generation at annual resolution by province and territory are used in the Energy Demand and Emissions model to calculate end-use electricity prices.

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