Canada is on track for a significant reduction in fossil fuel use by 2050, according to a new energy outlook from the Canada Energy Regulator (CER). Canada's Energy Future 2021: Energy Supply and Demand Projections to 2050 (EF2021) projects fossil fuel use, without carbon capture and storage technology, falling by 62 per cent in the next 30 years if Canada and the world continue the current pace of increasing action to reduce greenhouse gas (GHG) emissions. The same projection sees Canadians reducing their overall energy consumption by 21 per cent over the same period.
EF2021 explores how new technologies and climate policy will impact Canadian energy consumption and production trends over the next 30 years. The two main scenarios in the report play out differently depending on the degree of action to reduce GHG emissions.
The report shows that electricity will play a more significant role in satisfying energy needs. There is a nearly 45 per cent increase in electricity use to offset the decline in fossil fuel use. Low-cost wind and solar power provide much of the additional electricity needed to meet new demand over the projection period. Natural gas generation for electricity increasingly includes carbon capture and storage. By 2050, low and non-emitting electricity generation rises to 95 per cent from 82 per cent in 2021.
For the first time, EF2021 introduces six new scenarios to explore what Canada's electricity system might look like in a net-zero world. Electricity will be an essential contributor on Canada's path to reach net-zero. In these scenarios, the emissions from the electricity sector drop dramatically, with battery storage playing a significant role alongside immense growth in wind and solar. The report projects Canadian power systems to remain distinct across the country, even in a net-zero future.
Despite relatively low prices and more ambitious climate policies in the report’s main Evolving Policies Scenario, Canadian crude oil production levels are resilient to 2050. Production in 2050 is only slightly below today's levels. These levels largely stem from the nature of oil sands facilities, which are long-lived and have low operating costs once built. Production projections suggest the pipeline system out of Western Canada would still be nearly at capacity into the mid-2030s.
While Canadians will use less fossil fuels as Canada’s energy system decarbonizes, fossil fuel demand remains in 2050. Achieving net-zero will likely require greater long-term change than shown in the Evolving Policies Scenario.
The CER produces neutral and fact-based energy analysis to inform the energy conversation in Canada. This long-term Canadian energy supply and demand outlook covers all energy commodities and Canadian provinces and territories and makes projections using economic and energy models.