Canada’s Energy Outlook Estimates Coal Use to Decline 75% By 2040

Natural gas and renewables will be used to displace coal-fired electricity generation, which in turn will help lower Canada’s electricity emissions over the next 20 years.

December 04, 2019. By Ashish Wagh

The Canada Energy Regulator (CER) released its long-term energy outlook Tuesday, that explores how new technologies, infrastructure developments and climate policy will impact Canadian energy consumption and production trends over the next 20 years.

Canada’s Energy Future 2019: Energy Supply and Demand Projections to 2040 shows that while domestic fossil fuel consumption growth slows, crude oil and natural gas production continues to increase. The potential for LNG exports is an important driver of natural gas production while oil production growth is led by new phases of existing in-situ projects, the report revealed.

The report’s baseline outlook relies on a current economic outlook, a moderate view of energy prices, and climate and energy policies currently in place.

Canadian oil pricing and production trends will rely heavily on the availability of export pipeline and rail capacity. If approved pipeline projects (Trans Mountain, Keystone XL, Line 3) proceed as announced, along with continued volumes of crude by rail, there will be sufficient takeaway capacity to accommodate production growth over the next 20 years, according to CER. 

Regional differences across the country continue to drive the diversity of Canada’s electricity production. Natural gas and renewables will be used to displace coal-fired electricity generation, which in turn will help lower Canada’s electricity emissions over the next 20 years, the report states.  Installed capacity of wind and solar nearly doubles over the outlook period, but hydro will remain the dominant source of renewable electricity energy in 2040.

Natural gas and renewables will displace coal-fired generation in Alberta, Saskatchewan and Nova Scotia. Canada’s large base of hydro power will continue to produce electricity in British Columbia, Manitoba, Quebec and Newfoundland and Labrador.

By 2040, total fossil fuel use grows less than 1% from current levels, but growth varies significantly across the different fuel types. Natural gas use, the least GHG-intensive fossil fuel, increases by 18%. Oil product use declines by 7%, while coal use declines by nearly 75%.

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