Market Snapshot: Canada's energy use grows, but energy intensity declines

Release date: 2017-11-10

The NEB’s most recent long-term outlook, Canada’s Energy Future 2017: Energy Supply and Demand Projections to 2040 (EF2017), projects total energy use, which includes fossil-fuels, renewables and nuclear, to increase slightly in the baseline Reference Case. Despite increasing energy demand, the energy intensity of gross domestic product (GDP) declines. The energy intensity of GDP describes the relationship between energy use and Canada’s production of goods and services. This measure is a general indication of economy-wide, energy-efficiency.

Source and Description

Source: Canada’s Energy Future 2017: Energy Supply and Demand Projections to 2040

Description: This graph shows the percentage change in energy intensity, GDP and primary energy demand from 2015 to 2040 as projected in EF2017. The graph shows three different cases that all show a similar trend of lowered energy intensity. The Reference Case indicates that energy intensity will decrease by over 30% by 2040 from 2015 levels. The Technology Case shows almost a 37% decrease over the same interval. The Higher Carbon Price Case sits close to the Technology Case with close to a 34.5% decrease.

In the past, annual changes in energy consumption and GDP have been more closely linked. Years with high GDP growth also tend to have high energy demand growth. However, Canada’s energy intensity of GDP has been decreasingFootnote 1. This means GDP has been growing faster than energy consumption. This is due to improvements in efficiency and changes in industrial make up. This includes growth in less energy-intensive industries. Projections in EF2017 suggest a widening gap between GDP and energy use in the future. This gap is shaped by a number of significant factors: lower demand growth, federal and provincial climate policy initiatives, and the uptake of new technology.

EF2017 includes a Reference Case, a Higher Carbon Price Case, and a Technology Case that includes both an increasing price on emissions and a higher uptake of select emission-reducing technologies. The total energy demand projections range from a 6.4% increase in the Reference Case to a 2.7% decrease in the Technology Case by 2040. And despite differences in energy use between the Higher Carbon Price, Technology and Reference cases, GDP varies by less than 1% between the three cases through 2040.

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