Data centres – the industrial-scale technology complexes powering the world’s growing boom in artificial intelligence – require reliable, continuous energy. And a lot of it.

“Artificial Intelligence is the next big thing in energy, dominating discussions at all levels in companies, banks, investment funds and governments,” says Simon Flowers, chief analyst with energy consultancy Wood Mackenzie.

The International Energy Agency (IEA) projects that the power required globally by data centres could double in the next 18 months. It’s not surprising given a search query using AI consumes up to 10 times the energy as a regular search engine.

The IEA estimates more than 8,000 data centres now operate around the world, with about one-third located in the United States. About 300 centres operate in Canada.

It’s a growing opportunity in Alberta, where unlike anywhere else in the country, data centre operators can move more swiftly by “bringing their own power.”

In Alberta’s deregulated electricity market, large energy consumers like data centres can build the power supply they need by entering project agreements directly with electricity producers instead of relying solely on the power of the existing grid.

Between 2018 and 2023, data centres in Alberta generated approximately $1.3 billion in revenue, growing on average by about eight percent per year, lawyers with Calgary-based McMillan LLP wrote in July.

“Alberta has a long history of building complex, multi-billion-dollar infrastructure projects with success and AI data centres could be the next area of focus for this core competency,” McMillan’s Business Law Bulletin reported.

In recent years, companies such as Amazon and RBC have negotiated power purchase agreements for renewable energy to power local operations and data centres, while supporting the construction of some of the country’s largest renewable energy projects, McMillan noted.

While the majority of established data centres generally have clustered near telecommunications infrastructure, the next wave of projects is increasingly seeking sites with electricity infrastructure and availability of reliable power to keep their servers running.

The intermittent nature of wind and solar is challenging for growth in these projects, Rusty Braziel, executive chairman of Houston, Texas-based consultancy RBN Energy wrote in July

“These facilities need 24/7, super-reliable power, and there’s only one power generation fuel that has any hope of keeping up with the demand surge: natural gas,” Braziel said.

TC Energy chief operating officer Stan Chapman sees an opportunity for his company’s natural gas delivery in Canada and the United States.

“In Canada, there’s around 300 data centre operations today. We could see that load increasing by one to two gigawatts before the end of the decade,” Chapman said in a conference call with analysts on August 1.

“Never have I seen such strong prospects for North American natural gas demand growth,” CEO François Poirier added.

Alberta is Canada’s largest natural gas producer, and natural gas is the base of the province’s power grid, supplying about 60 percent of energy needs, followed by wind and solar at 27 percent.

“Given the heavy power requirements for AI data centres, developers will likely need to bring their own power to the table and some creative solutions will need to be considered in securing sufficient and reliable energy to fuel these projects,” McMillan’s law bulletin reported.

The Alberta Electric System Operator (AESO), which operates the province’s power grid, is working with at least six proposed data centre proposals, according to the latest public data.

“The companies that build and operate these centres have a long list of requirements, including reliable and affordable power, access to skilled labour and internet connectivity,” said Ryan Scholefield, the AESO’s manager of load forecasting and market analytics.

“The AESO is open for business and will work with any project that expresses an interest in coming to Alberta.”

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Faced with soaring costs that rippled across economies, governments around the world embraced the critical need for energy security in 2023, adopting a more pragmatic approach to achieving climate goals. 

The world used more crude oil and coal in 2023 than anytime in human history, while global demand for liquefied natural gas (LNG) continued to grow as a vital fuel source, primarily in Europe and Asia. 

Europe in particular stepped back from some of its more aggressive timelines for reducing its reliance on oil and gas, with some nations striking long-term supply deals for LNG, returning to burning coal, or renewing investment in oil and gas exploration. 

Economic powerhouses China and India increasingly turned to coal to power their developing economies, spurring global growth of the most emissions-intensive fuel, while the U.S. maintained its lead as the world’s largest producer of oil and gas, setting new high water marks for both. 

Canada, meanwhile, saw steady progress on some key energy projects, completing construction of the Coastal GasLink pipeline, achieving major milestones on the LNG Canda export terminal, seeing the Trans Mountain pipeline expansion near completion, and the approval of a new major oil sands project for the first time in five years. 

The following is a recap of some of the key events from 2023, outlining how oil and gas have once again taken centre stage in the aftermath of Russia’s 2022 invasion of Ukraine, and the global energy crisis that it made worse: 

January 

• Japanese Prime Minister Fumio Kishida visits Canada to make a personal appeal for more access to LNG. Like German Chancellor Olaf Scholz just five months earlier, Kishida is essentially rebuffed by Prime Minister Justin Trudeau. 
• The International Energy Agency predicts that global oil demand will reach a record high in 2023, an increase of 1.9 million barrels per day from 2022’s previous peak. 
• With LNG emerging as a critical resource to deal with the lingering global energy crisis, the United States catches up to Qatar as the world’s largest exporter.  

February 

• India’s Prime Minister Narendra Modi projects his country will see demand for natural gas rise by 500 per cent while its share of global oil demand will increase from 5 to 11 per cent over the next 20 years. Meanwhile, India begins the search for long-term suppliers of LNG in an effort to reduce its reliance on coal. 
• The bill for the 2022 energy crisis comes due in Europe, where it’s learned European governments shelled out nearly US$900 billion to shield households and businesses from its impacts. Germany, which was a world leader in transitioning to renewable energy led the way in efforts to blunt the energy crisis’ impact, handing out nearly US$300 billion in subsidies. 
• Recognizing the rising global importance of reliable energy, Canadian oil producer IPC greenlights the first major new oil sands project in five years. The C$1.1 billion Blackrod project, which will be built to produce 30,000 barrels per day, is expected to be in operation by 2026. Meanwhile, Cenovus Energy filed an application to extend production at its Christina Lake oil sands project to 2079. 

March 

• China shows signs of economic resurgence after re-opening from its sweeping “zero-Covid” policies. The IEA projects China will account for nearly half of all projected growth in oil demand in 2023. 
• In the U.S., the Biden Administration approves a massive new oil project in Alaska, expected to produce as much as 180,000 barrels per day of crude oil over the course of 30 years. The project is also estimated to create some $17 billion in revenue for the U.S. federal government. 
• A new report by the UK-based Energy Transitions Commission finds that global investments in green energy would need to increase to $3.5 trillion per year in order to reach global net zero targets by 2050. That would add up to $110 trillion in new spending by 2050, more than the world’s current combined GDP. 

April 

• Indigenous leaders involved in Canada’s energy industry meet with diplomats from several of Canada’s G7 allies to make the case for being at the table when it comes to helping provide the energy the world needs. With Indigenous communities playing crucial roles in developing Canada’s LNG capacity, participants said diplomats showed significant interest in building economic relationships. 
• Leaders of the G7 meet in Hiroshima, Japan and agree that LNG will play an “important role” in helping navigate the global energy crisis and further investment in the industry is crucial. Despite pressure to agree to a full phase out of coal by 2030, the G7 will only agree to “accelerating the phase out of domestic unabated coal.” 
• A global survey that polled over 24,000 people in 28 countries found that Canada was the number one choice for countries that import oil, citing Canada’s strong record of democracy and environmental safety compared to other major producers like Saudi Arabia and Russia. 

May 

• Recognizing the growing need for energy security across Europe and the world, Norway says oil and gas companies have a “social responsibility” to find more oil and natural gas resources in the northern Barents Sea adding they should “leave no stone unturned” in the pursuit of the critical resources. A month later Norway approves $18.5 billion to develop 19 offshore oil and gas projects. 
• Skyrocketing demand for oil, led primarily by China’s economic surge, forces the IEA to recalculate its predictions for the year, upgrading its demand growth estimate to 2.2 million barrels per day to further increase record usage around the world. 
• Canada’s Public Policy Forum estimates phasing out the country’s oil and gas industry in an effort to reduce emissions will lead to the loss of some $100 billion to the nation’s economy by 2050, with Alberta bearing the brunt of the blow. “This essentially amounts to a deep recession without a recovery ever materializing,” the authors wrote. 

June 

• Qatar signs the first of several long-term LNG deals it will sign in 2023. Staring with two 27-year agreements to supply China with LNG, the Middle East supplier then signs another 15-year agreement with energy-starved Bangladesh. 
• Despite Western sanctions, Russian oil companies see gasoline exports jump 37 per cent compared to 2022 thanks to new customers in Africa and Asia. Meanwhile, China’s crude oil imports from Russia soar to a record high. 
• The annual Statistical Review of World Energy shows that record increases in solar and wind installations in 2022 failed to make a dent in the dominance of oil and gas in the global energy mix. Even with a record increase of 266 gigawatts of new renewable capacity, oil,gas and coal continued to represent 82 per cent of global energy consumption. 

July 

• The U.K. announces it will grant hundreds of new licences for oil and gas exploration in the North Sea in an effort to ensure energy security. Prime Minister Rishi Sunak says even if the U.K. achieves net zero by 2050, oil and gas will still be used for at least a quarter of its energy needs. 
• Japan, one of the world’s largest energy importers, calls for the creation of a global emergency reserve for natural gas to avoid future shortages and price spikes. 
• With rising global demand for LNG, the CEO of QatarEnergy predicts the tiny Middle Eastern nation will supply some 40 per cent of new LNG coming to market by 2029 as the U.S. works to significantly ramp up its industry.  

August 

• Independent researchers announce that China continues to ramp up coal power use, permitting 52 gigawatts of new capacity over the first six months of 2023. The additional plants would increase China’s coal burning capacity by 23 per cent. 
• Independent analysis by S&P Global finds that Canada’s oil sands emissions remained flat in 2022, despite production growth, a positive sign that measures to reduce emissions  are working. 
• For the second year in a row, Pakistan is forced out of the pricey LNG market, putting the impoverished country at high risk of a national energy crisis. 

September 

• Meeting in India, leaders of the G20 highlight the importance of energy security, and while agreeing to triple renewable capacity by 2030 avoid any language calling for a phase out of fossil fuels. Fault lines emerge between the West and developing nations that want to harness oil, natural gas and coal to grow their economies. 
• The IEA releases its updated road map for reaching net zero, suggesting global demand for fossil fuels will peak before 2030. The stance is blasted by OPEC as one that could lead to global “energy chaos” and ignores the IEA’s own acknowledgement that one the world’s current trajectory, oil, gas and coal will still account for 62 per cent of the world’s energy mix in 2050, compared to 78 per cent in 2021. 
• Saudi Aramco, one of the world’s largest oil producers, announces its intention to enter the burgeoning LNG industry, buying a minority stake in MidOcean Energy, which is looking to obtain stakes in four Australian LNG projects. 

October 

• Qatar officially breaks ground on the world’s largest LNG project, which will expand its production capacity from 77 million tonnes per year to 110 million tonnes per year. The groundbreaking coincides with three new 27-year LNG supply agreements with France, Italy and the Netherlands.  
• In its annual World Oil Outlook, OPEC warns the world will need $14 trillion in new investments in the oil sector by 2045 to ensure market stability and reduce the likelihood of energy shortages and economic chaos. 
• The U.S. eases sanctions on Venezuela’s oil sector in exchange for the promise of free and fair elections for the South American dictatorship. Less than two weeks later, Venezuela’s supreme court suspends the results of an opposition party’s primary ahead of a 2024 national election. 

November 

• Three years after shovels first hit the ground, TC Energy announces it has reached mechanical completion of the Coastal GasLink pipeline. The 670-kilometre will be a critical piece of infrastructure for Canada’s developing LNG industry. 
• Despite its earlier World Energy Outlook suggesting a looming peak for oil demand, the IEA revises its prediction for 2024, estimating global demand for oil will reach a new record high of 102.9 million barrels per day next year. A more bullish OPEC predicts oil demand will reach 104.4 million barrels per day in 2024. 
• The U.K. government says it’s working toward legislation that would make annual oil and gas licensing rounds for the North Sea mandatory if the country is set to import more oil and gas than it produces domestically. 

December 

• World leaders leave COP28 in Dubai agreeing to eventually transition away from fossil fuels, aiming to reach carbon neutrality by 2050. But a key inclusion calls for the acceleration of low- and zero-emission technology like carbon capture and storage, an innovation in which Canada is a global leader. 
• Fresh off the U.S. lifting sanctions on its oil industry, Venezuela claims sovereignty over an oil-rich region of neighbouring Guyana – accounting for about two-thirds of its territory – after ignoring ongoing proceedings in the International Court of Justice to settle the long-standing dispute. 
• Russia says its crude oil exports will be seven per cent higher than in 2021 despite ongoing sanctions from the West. After losing most of its European customers, Russia reports that China and India now account for more than 90 per cent of its crude oil exports.  

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The following summary facts and data were drawn from 30 Fact Sheets and Research Briefs and various Research Snapshots that the Canadian Energy Centre released in 2023. For sources and methodology and for additional data and information, the original reports are available at the research portal on the Canadian Energy Centre website: canadianenergycentre.ca.

Environment

1.

Canada’s share of Global CO2 emissions is dropping

Since the Kyoto Summit in 1997, Canada’s share of the world’s CO2 emissions has fallen from 2.2 per cent to 1.6 per cent. Canada’s share of world CO2 emissions decreased by 25 per cent from the Kyoto climate summit to the recent Dubai climate summit.

Source: CEC Research, Calculation from Various Database (2023)

2.

Canadian natural gas is getting cleaner

Emissions intensity is the emission rate of a given pollutant relative to the intensity of a specific activity or industrial production process. Emissions intensity is determined by dividing the number of absolute emissions by some unit of output, such as GDP, energy used, population, or barrel of oil produced. Between 2010 and 2021, the CO2 emissions intensity of Canadian natural gas production fell from 63.5 kilograms CO2e per barrel of oil equivalent to 44.5 kilograms CO2e per barrel of oil equivalent, a decline of nearly 30 per cent.

Source: Derived from Rystad Energy

3.

Canadian oil sands production is getting cleaner

Between 2000 and 2021, the emissions intensity of the oil sands subsector fell from 111.8 kilograms CO2e per barrel to just under 79.3 kilograms CO2e per barrel, a decline of over 29 per cent. As GHG emissions intensity in the upstream oil sector continues to decline and because Canada’s ESG performance remains highly rated, Canadian oil has the potential to become the barrel of choice on the world stage.

Source: Derived from Rystad Energy

4.

Canada’s oil and gas sector is doing its part to reduce methane emissions

Gas flaring is the burning off of the natural gas that is generated in the process of oil extraction and production. It is a significant source of greenhouse gas emissions (GHGs). In 2022, 138,549 million cubic meters (m3) (or 139 billion cubic meters (bcm)) of flared gases were emitted worldwide, creating 350 million tonnes of CO2 emissions annually. At 945 million m3 in 2022, Canada was the eighth lowest flarer among the world’s top 30 oil and gas producers (23rd spot). Canada decreased its flaring emissions by 320 million m3 from its 2012 level of 1,264 million m3, a 25 per cent drop. In 2022, Canada contributed just 0.7 per cent of the global amount of gas flaring despite being the world’s fourth largest oil producer.

Source: World Bank (undated)

5.

Environmental spending by Canada’s oil and gas sector remains high

Canadian businesses spent $28.6 billion on environmental protection between 2018 and 2020. When capital and operating expenses on environmental protection are combined, out of that $28.6 billion the oil and gas sector spent $9.4 billion, or nearly 33 per cent. In 2020 alone, when capital and operating expenses on environmental protection are combined, the oil and gas sector spent $2.7 billion, or 27 per cent of all Canadian business spending on the environment that year.

Source: Derived from Statistics Canada, Table 38-10-0130-01

6.

Alberta among top provincial spenders on environmental protection

Industries are not alone in spending money on environmental protection; provincial governments do as well. Total provincial government spending on environmental protection between 2008 and 2021 was nearly $143.5 billion. In 2021, Alberta spent $22.6 billion or 15.7 per cent of all provincial expenditures on the environment, while its proportion of the national population was 11.6 per cent.

Source: Statistics Canada, Tables 10-10-0005-01 and 17-10-0005-01; and authors’ calculations

Economics of the Oil and Gas Sector

7.

Revenue contribution from the oil and gas sector: $578.7 billion between 2000 and 2021

The gross revenue contribution to federal, provincial, and municipal governments received exclusively from the oil and gas sector was $578.7 billion between 2000 and 2021, an average of $26.3 billion per year. The $578.7 billion figure includes $461.6 billion in direct provincial revenues, $99.6 billion in direct federal revenues, and $17.3 billion in indirect federal, provincial, and municipal taxes.

Sources: Statistics Canada, 2022 (a, b, c, d), Statistics Canada 2023 (a,b), and CAPP, 2022

8.

Projected government revenues from Canada’s oil sands sector: US$231 billion from 2023 to 2032

Government revenues from Canada’s oil sands sector (which includes provincial royalties and federal and provincial corporate taxes) are expected to rise from US$17.1 billion in 2023 to US$28.7 billion in 2032—nearly US$231 billion cumulatively—assuming the price of oil is a flat US$80 per barrel. Both projections would be about 20 per cent more in Canadian dollars at the current exchange rate.

Source: Derived from Rystad Energy

9.

Projected capex from Canadian oil sands sector: nearly US$113 billion over the next decade

Capex from the Canadian oil sands sector is projected to reach US$112.7 billion over the next decade. Assuming a flat US$80 per barrel for the price of oil, oil sands sector capex is expected to rise from US$10.1 billion in 2023 to US$14.2 billion in 2032. Those projections would be about 20 per cent more in Canadian dollars at the current exchange rate.

Source: Derived from Rystad Energy

10.

Canadian overall upstream oil sector supply costs have declined over 35% since 2015

The cost of supply for the Canadian upstream oil sector is the minimum constant dollar price needed to recover all capital expenditures, operating costs, royalties, taxes, and earn a specified return on investment. Supply costs indicate whether the upstream oil sector is economically viable.

Supply costs within Canada’s upstream oil sector declined significantly between 2015 and 2022. At the end of 2015, the Canadian upstream oil sector’s weighted average breakeven price was nearly US$76.00 per barrel of Brent. By the end of 2022, that weighted average breakeven price was US$49.09 per barrel of Brent, a decline of US$26.91 per barrel, or over 35 per cent since 2015. This number incorporates different phases of oil production including producing, under development, and discovery.

Source: Derived from Rystad Energy

11.

Breakeven costs in Canadian natural gas sector fifth lowest in the world

The Canadian natural gas sector had a weighted average breakeven gas price of US$2.31 per thousand cubic feet (mcf) in 2022, fifth lowest among major natural gas producing countries. Only in Saudi Arabia (US$1.09 per mcf), Iran (US$1.39 per mcf), Qatar (US$1.93 per mcf), and the United States (US$2.22 per mcf) was the breakeven gas price lower. The weighted average breakeven costs for Canada‘s natural gas sector in 2022 were lower than in Russia, Norway, Algeria, China, and Australia.

Source: Derived from Rystad Energy

12.

Natural gas prices have skyrocketed

Natural gas prices have skyrocketed around the world in the last two years. In 2021, the price of natural gas in Asia was US$18.60 per million British thermal units (mmbtu) compared to US$4.40 per mmbtu in 2020—an increase of 323 per cent in just one year. By comparison, in 2021 natural gas sold for US$2.80 per mmbtu on Alberta’s AECO-C trading hub; in Asia it was US$15.88 per mmbtu more (or 564 per cent higher). Between 2019 and 2021, the price gap between Henry Hub in the US and AECO-C natural gas fluctuated from a high of 98 per cent in 2019 to a low of 26 per cent in 2020. In 2021, U.S. natural gas sold for US$3.84 per mmbtu, 40 per cent higher than the US$2.75 per mmbtu average price for AECO-C natural gas that year.

Sources: BP Statistical Review of World Energy and International Monetary Fund

13.

Projected government revenues from the Canadian natural gas sector: over US$227 billion through 2050

Government revenues from the Canadian natural gas sector are projected to reach over US$227 billion through 2050. Under a Henry Hub price for natural gas of US$3.00 per thousand cubic feet (kcf), government revenues from the country’s natural gas sector are expected to rise from US$1.4 billion in 2023 to US$3.4 billion in 2050. Should the Henry Hub price reach US$4.00 per kcf, government revenues from the country’s natural gas sector would be projected to rise from US$2.0 billion in 2023 to US$10.0 billion in 2050.

Source: Derived from Rystad Energy

14.

Small business plays a key role in the oil and gas sector

Small business plays a key job creation role in Canada’s economy. Statistics Canada defines small businesses as those with between one and 99 paid employees. Medium-size enterprises are those with 100 to 499 employees, while large enterprises have 500 or more employees. In 2022, of the oil and gas firms in Canada, 96.0 per cent were small, 3.5 per cent were medium-sized, and 0.6 per cent were large companies.

With the exception of construction, the oil and gas sector in Canada has a higher proportion of small businesses than other major industries. As of 2022, 96.0 per cent of all oil and gas energy firms had between 1 and 99 employees compared with 93.2 per cent in manufacturing, 89.6 per cent in utilities, and 99.0 per cent in the construction sector. The all-industry average is 98.0 per cent.

Source: Authors’ calculation based on Statistics Canada Table 33-10-0661-01

15.

Canada’s oil and gas sector has an impact on key industries across the Canadian economy

In 2019, the activities of the Canadian oil and gas sector were indirectly responsible for significant portions of the GDP created by other key industries across Canada. The sector’s activities generated $100.9 million in GDP in the food and beverage merchant wholesalers industry that year and nearly $4.1 billion in GDP in architectural, engineering, and related services. In 2019, the top five industries whose GDP was most affected by their association with Canada’s oil and gas sector included:

• Architectural, engineering, and related services: $4.1 billion
• Machinery, equipment, and supplies merchant wholesalers: $3.4 billion
• Banking and other depository credit intermediation: $2.1 billion
• Computer systems design and related services: $1.7 billion
• Electrical power generation, transmission, and distribution: $1.5 billion

Source: Statistics Canada

16.

Employment and wages in the oil and gas sector remain high

In 2021, the oil and gas sector directly employed 147,371 Canadians. The number of direct jobs in the sector rose from 158,483 in 2009 to 185,393 in 2014, then fell to 134,939 in 2016, the result of the sharp decline in energy prices, before rising to 160,379 in 2019 as energy prices gradually recovered. The onslaught of COVID-19 in 2020 saw oil and gas sector jobs fall back to 135,475, before recovering to 147,371 in 2021. The average salary of a worker in the Canadian oil and gas sector in 2021 was $133,293. The average salary for a worker in the sector had risen from $103,448 in 2009 to $133,776 in 2015, before leveling off to $129,716 in 2019 due to the energy price slump. However, between 2009 and 2021, the average annual wage of a worker in the Canadian oil and gas sector increased by nearly 29 per cent.

Source: Statistics Canada

Social and Governance

17.

Women’s employment in Canada’s oil and gas sector is recovering

The number of females employed in the oil and gas sector reached a high of 42,440 in 2013, dipping to 30,285 in 2020 due to COVID-19, and then recovering somewhat to 33,068 in 2021. Between 2009 and 2021, the average wage for a female worker in the Canadian oil and gas industry increased by over 53 per cent.

Source: Statistics Canada

18.

Diversity increasing in the oil and gas sector

Between 2009 and 2021, workers in the Canada’s oil and gas sector who identified as Indigenous increased by nearly 17 per cent. Between 2009 and 2021, the average salary of an Indigenous person employed in Canada’s oil and gas sector increased by over 39 per cent.

Source: Statistics Canada

19.

More new Canadians working in the oil and gas sector over the long term

In 2021, 24,931 immigrants were directly employed in the Canadian oil and gas sector. The number of immigrants employed in the oil and gas industry reached 28,469 by 2014, declining to 21,622 in 2016 before recovering to 26,569 in 2019. Between 2009 and 2021, immigrant employment in the Canadian oil and gas sector increased by over 9 per cent. Between 2009 and 2021, the average wage and salary of an immigrant employed in the Canadian oil and gas sector increased by nearly 25 per cent.

Source: Statistics Canada

Carbon Capture, Utilization and Storage (CCUS)

20.

Carbon Capture, Utilization and Storage (CCUS) growing across the world

At the end of 2022, there were 65 commercial carbon capture, utilization and storage (CCUS) projects in operation globally capable of capturing nearly 41 million tonnes per annum (mtpa) of CO2 across various industries, including the oil and gas sector. There are another 478 projects in various stages of development around the world that will be capable of capturing roughly another 559 mtpa of CO2. These projects are in various stages of development: some are at the feasibility stage while others are in the concept and construction phases. If all projects move ahead as scheduled, by 2030 it is estimated that nearly 500 CCUS projects could be operating worldwide, having the ability to capture 623.0 mtpa of CO2. In fact,  between 2023 and 2030, global carbon capture capacity could grow from 43.5 mtpa to 623.0 mtpa, an increase of over 1,332 per cent.

Source: Derived from Rystad Energy

21.

Projected Carbon Capture, Utilization and Storage (CCUS) in Canada has a bright future

Global carbon capture capacity and worldwide spending trends to date underline the fact that the future is bright for Canadian investments in CCUS. Assuming that appropriate government policies and regulations are put in place, Canada can expect to see further project announcements and increased investment in the technology. Canada will likely emerge as a CCUS heavyweight given the prevailing policy environment and the existential need for oil sands players to decarbonize. Rystad Energy estimates that Canada alone could account for around 20 per cent of cumulative carbon capture demand between 2023 and 2030.

Source: Derived from Rystad Energy

Nuclear and Renewables

22.

Nuclear energy a stable source of electricity production in Canada

Nuclear power plants have been producing electricity in Canada since the 1960s. As of 2022, four nuclear power plants operate in Canada: three in Ontario and one in New Brunswick. Canada’s share of nuclear electricity production has remained relatively stable over the past few decades. In 1990, nuclear energy accounted for about 14.8 per cent of Canada’s electricity production; by 2021, this share had decreased only slightly to about 14.3 per cent.

Source: International Atomic Energy Agency

23.

Canada’s trade in renewable products is modest

Trade is an essential component of Canada’s economic activity, accounting for about two-thirds of the economy and employing 3.3 million people. In 2021, Canada imported solar panel products with a value of CAN$653 million and wind turbine products with a value of CAN$91 million. The value of the solar panels and wind turbines Canada imported was much higher than the CAN$260 million export value for both products.

Source: Government of Canada, Trade Data Online

Liquefied Natural Gas (LNG)

24.

Global LNG production projected to rise

Global liquefied natural gas (LNG) production is expected to reach nearly 720 million tonnes by 2035. That year the United States is projected to be the world’s leading LNG producer at 259 million tonnes, followed by Qatar at 121 million tonnes, and Australia at 78 million tonnes. Russian LNG supply was expected to grow to 54 million tonnes by 2035, but this is now in question, leaving opportunities for countries such as Canada to fill the void. In fact, by 2035, Canada could be the fifth largest LNG producer at nearly 33 million tonnes of LNG.

Source: Derived from Rystad Energy

25.

Canadian LNG exports could help reduce global emissions

Asia is a significant source of CO2 emissions. Canadian LNG exports can help in reducing emissions from the Asian energy mix. If Canada increases its LNG export capacity to Asia, by 2050 net global emissions could decline by 188 million tonnes of CO2 equivalent per year. That would have the annual impact of taking 41 million cars off the road.

CEC Research Briefs

Canadian Energy Centre (CEC) Research Briefs are contextual explanations of data as they relate to Canadian energy. They are statistical analyses released periodically to provide context on energy issues for investors, policymakers, and the public. The source of profiled data depends on the specific issue. This research brief is a compilation of previous Fact Sheets and Research Briefs released by the centre in 2023. Sources can be accessed in the previously released reports. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using the original data sources.

About the author

This CEC Research Brief was compiled by Ven Venkatachalam, Director of Research at the Canadian Energy Centre.

Acknowledgements

The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer for the review of this paper.

Creative Commons Copyright

Research and data from the Canadian Energy Centre (CEC) is available for public usage under creative commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

European governments are beginning to sound the retreat on some foundational net zero policies in the wake of “greenlash” from increasingly overburdened citizens.  

Russia’s invasion of Ukraine in 2022 prompted European governments to begin pivoting away from cheap Russian natural gas, which Europe increasingly relied on to backstop a laundry list of ambitious green policies. 

But despite pledges by the European Union to “divest away from Russian gas as quickly as possible,” nearly 15% of overall EU gas imports still came from Russia in the first half of 2023, while the amount of liquefied natural gas (LNG) imported from Russia actually increased by 39.5% compared to the same period in 2021, prior to the Ukraine invasion. 

Energy security and affordability have become central issues for Europeans amid a persistent global energy crisis, and that’s translated into a rethink of what had once seemed like unassailable green policies across Europe. 

Here’s a look at how some countries are dealing with the new global reality: 

Germany 

Nothing is more symbolic of Europe’s retreat from its net zero ambitions than Germany seeing a wind farm dismantled to make room for the expansion of a lignite coal mine just outside of Dusseldorf. 

And no European country has been more affected by the changing energy landscape than Germany, which introduced its multi-billion dollar Energiewende program in 2010, calling for a broad phaseout of fossil fuels and nuclear power, replacing them primarily with wind and solar power. 

Today, without cheap and reliable natural gas backups due to sanctions against Russia, Germany has gone from Europe’s economic powerhouse to the world’s worst performing major developed economy, facing “deindustrialization” due to skyrocketing energy costs. 

In addition to extending its deadline for shutting down coal plants until 2024, the German government has also scrapped plans for imposing tougher building insulation standards to reduce emissions as well as extending the deadline on controversial legislation to phase out oil and gas heating systems in homes, a decision the government admits will make it impossible to reach the country’s 2030 emissions targets. 

A major car manufacturer, Germany’s opposition to an EU-wide ban on the sale of new combustion vehicles by 2035 softened the legislation to allow exceptions for those that run on e-fuels. 

Germany’s quest for reliable energy exports prompted Chancellor Olaf Scholz to travel to Canada to make a personal appeal for Canadian LNG. He was sent home empty handed, advised there wasn’t a strong business case for the resource. 

Great Britain 

Britons have grown increasingly concerned about the cost of net zero policies, despite being largely supportive of striving for a greener future. 

A YouGov poll in August found while 71% generally favoured Great Britain’s aim to reduce carbon emissions to net zero by 2050, some 55% agreed that policies should only be introduced if they don’t impose any additional costs for citizens. Only 27% agreed reaching the goal was important enough to warrant more spending. 

That shift in public sentiment prompted Prime Minister Rishi Sunak to pump the brakes on some key policies enacted to reach the U.K.’s legally binding target of reaching net zero emissions by 2050. 

In September, the government delayed its looming ban on new gas- and diesel-powered cars by five years to 2035, while also extending its phaseout of gas boilers in homes and suggesting exemptions for certain households and types of property. 

“If we continue down this path, we risk losing the British people and the resulting backlash would not just be against specific policies, but against the wider mission itself,” Sunak said of the potential consequences of maintaining strict net zero policies. 

The U.K. government also gave the green light for hundreds of new North Sea oil and gas licences, citing the need to bolster both energy security and the nation’s economy.  

France 

France’s net zero ambitions enjoy an advantage compared to its European peers due in large part to its significant fleet of nuclear power stations, which provide around 70 per cent of its electricity. 

However, President Emmanuel Macron has often opted for a more pragmatic approach to reaching climate targets, noting any energy transition can’t leave citizens disadvantaged. 

“We want an ecology that is accessible and fair, an ecology that leaves no one without a solution,” Macron said in September after ruling out a total ban on gas boilers, instead offering incentives to those looking to replace them with heat pumps. 

Macron also famously dropped a proposed fuel tax in 2018 that sparked sweeping yellow vest protests across France when it was announced.  

France has also extended the timeframe of its two remaining coal plants to continue operating until 2027, five years later than the plants were originally set to be shuttered. 

Italy 

Feeling the impacts of the global energy crisis, Italy has begun reassessing some of its previous commitments to transition goals. 

Earlier this year, Italy pushed back on EU directives to improve the energy efficiency of buildings, which Italy’s national building association warned would cost some $400 billion euros over the next decade, with another $190 billion euros needed to ensure business properties met the required standards. The Italian government has called for exemptions and longer timelines. 

Italy also warned the European Commission it would only support the EU’s phase out of combustion engine cars if it allows cars running on biofuels to eclipse the deadline, while further questioning a push to slash industrial emissions.  

Paolo Angelini, deputy governor at the Bank of Italy, warned a rapid abandonment of fossil fuel-driven industries could have a devastating impact. 

“If everybody divests from high-emitting sectors there will be a problem because if the economy does not adjust at the same time, things could blow up unless a miracle happens in terms of new technology,” he said. 

Poland 

Like Italy, Poland has dug in its heels against some EU net zero initiatives, and is actually suing the EU with the goal of overturning some of its climate-focused legislation in the courts. 

“Does the EU want to make authoritarian decisions about what kind of vehicles Poles will drive and to increase energy prices in Poland? The Polish Government will not allow Brussels to dictate,” wrote Polish Climate and Environment Minister Anna Moskwa on X, formerly known as Twitter, in July. 

In addition to looking to scrap the EU’s ban on combustion engine cars by 2035, Warsaw is also challenging laws around land use and forestry, updated 2030 emissions reduction targets for EU countries, and a border tariff on carbon-intensive goods entering the European Union. 

With some 70% of its electricity generated by coal, Poland is one of Europe’s largest users of coal. And it has no designs on a rapid retreat from the most polluting fossil fuel, reaching an agreement with trade unions to keep mining coal until 2049. 

Netherlands 

The political consequences of leaning too far in on net zero targets are beginning to be seen in the Netherlands. 

In March, a farmer’s protest party, the BBB or BoerBurgerBeweging (Farmer-Citizen Movement), shook up the political landscape by capturing 16 of 75 seats in the Dutch Senate, more than any other party, including the ruling coalition of the Labor and Green Parties. 

The upstart party was formed in 2019 in response to government plans to significantly reduce nitrogen emissions from livestock by 2030, a move estimated to eliminate 11,200 farms and force another 17,600 farmers to significantly reduce their livestock. 

What followed were nationwide protests that saw supermarket distribution centres blockaded, hay bales in flames and manure dumped on highways. 

In November, Dutch voters will elect a new national government, and while BBB has dropped to fifth in polling, much of that support has been picked up by the fledgling New Social Contract (NSC), which has vowed to oppose further integration with EU policies, a similar stance offered by the BBB. The NSC currently tops the polls ahead of the Nov. 22 election. 

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Calgary-based Gibson Energy has entered into a 15-year agreement to power more than half of its annual electricity needs with wind.

The company, which handles about one in four barrels of oil produced in western Canada through its network of pipelines and terminals, will receive the power supply from two wind farms owned by Capstone Infrastructure and the Sawridge First Nation.  

“We want to make sure that our assets are run as sustainably as possible,” says Sean Wilson, Gibson’s chief administrative and sustainability officer.  

“From an emissions perspective [that is] to continue to reduce if not eliminate some of our emissions footprints for those assets.” 

The Buffalo Atlee 2 and 4 wind farms are under construction near Jenner, Alberta. With combined nameplate capacity of 26 megawatts, the projects are expected to offset approximately 300,000 tonnes of carbon emissions over the term of the agreement, the equivalent of taking more than 65,000 internal combustion vehicles off the road. 

The Sawridge First Nation is located at the east end of Lesser Slave Lake in Alberta near the Town of Slave Lake and is an original signatory to Treaty No. 8 (signed June 21, 1899). 

“Maintaining the balance of our needs and the needs of the land is ingrained within the spiritual practices of the nation,” Sawridge First Nation councillor Sam Twinn said in a statement. 

“We feel this balance is being achieved with the Buffalo Atlee project with our friends at Capstone, and Gibson Energy.” 

Gibson’s operations are located across North America, with core terminal assets in Hardisty and Edmonton, Ingleside, Texas, and Moose Jaw, Saskatchewan.  

Since 2020, the company has reduced the intensity of its Scope 1 (direct) and Scope 2 (indirect) emissions in storage and handling by 25 per cent. Incorporating wind power will help reduce Scope 2 emissions, or indirect emissions from electric power. 

“Where this project was really compelling for us is it’s going to help us achieve if not almost completely help us achieve our 2025 sustainability target, which is reducing our Scope 2 emissions by 50 per cent, and it’s going to set us up really well for our 2030 target, which is eliminating all of our Scope 2 emissions,” Wilson says.  

“Our philosophy has been to continue to meet or exceed the expectations of not only regulatory but also our communities and that broader expectation on sustainability.  

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Emerging energy resources are taking on greater importance in Canada’s oil and gas heartland.  

Producers will spend $730 million this year developing hydrogen, geothermal, lithium and helium resources, according to the Alberta Energy Regulator (AER).  

That’s a nearly 250 per cent increase from 2020, and it’s expected to continue rising.  

“We have advantages in all four categories,” says AER principal economist Afshin Honarvar. “They are important.”  

The AER first included emerging resources in its annual outlook in 2022, listing capital expenditures for hydrogen, geothermal and helium alongside oil, gas and oil sands. This year the AER added lithium to the outlook as well.  

Annual spending on emerging resources in Alberta is projected to reach $840 million in 2032, or a total of about $9 billion between 2020 and 2032. 

“It makes sense for us as the regulator to use our expertise in economics as well as the data that we have to track the progress in these areas,” Honarvar says.  

“That is interesting for people to know. Provincially, nationally and globally this is something they are interested in, and they would like to see how we are progressing.” 

The AER’s spending projection is based on public project announcements and estimated capacity additions, the regulator said.  

The temporary pause on renewable electricity generation projects reviews and approvals that applies to the Alberta Utilities Commission does not apply to regulatory approvals from the AER, a spokesperson told CEC. 

Hydrogen 

Hydrogen is the most advanced of Alberta’s emerging resources. The province is already Canada’s largest hydrogen producer, generating about 2.5 million tonnes of the country’s three million tonnes per year of the resource, mainly used for industrial processes.  

Alberta is also already producing so-called “blue hydrogen” from natural gas, where emissions are removed through carbon capture and storage (CCS) technology. Since 2015, the Quest project near Edmonton has safely captured and stored more than 7 million tonnes of CO2 emissions while producing clean hydrogen for the Scotford oil sands facility. 

Among new hydrogen projects underway in Alberta is a $1.6 billion net zero complex owned by Air Products. It will provide supply to the province’s first commercial-scale hydrogen refueling station, as well as Imperial Oil’s new renewable diesel facility.  

Honarvar says Alberta’s advantage as a hydrogen producer for future fuels comes from its vast resources of natural gas, and the energy industry’s experience. 

“We have the right skill set; we have the right infrastructure. We have the human resources, with the knowledge that can be transferable in this area very easily,” he says.  

“Geothermal is no different.”  

Geothermal 

Geothermal energy, or heat originating from below the earth’s surface, can be produced using water or other fluids and used for heating or generating clean electricity.  

Geothermal is relatively untapped in Alberta, but AER data shows development is accelerating.   

“We forecast an average growth rate of 13 per cent in our outlook. The base is small, but the pace of growth is fast,” Honarvar says.  

“Geothermal is about repurposing existing oil and gas wells. We have produced from oil and gas wells for many years. We are very familiar with that technology, and we have the knowledge of how to utilize that kind of resource.” 

Lithium 

Alberta’s long-established oil and gas sector also provides advantages for lithium production, Honarvar says. In Alberta, lithium – an ultra-light metal used in consumer electronics as well as electric vehicles and battery storage systems – is found in so-called brine.  

“Brine is basically the water that gets produced with oil and gas.  We have been dealing with brine for many, many years, but in the past we were not using it, we were injecting it back into the ground,” he says.  

“Now the plan is to extract the lithium that is available in those brines. The price of lithium has increased a lot over the past few years and that has created that window of opportunity for Alberta because some of those marginal resources now they are becoming a gold mine.” 

Helium 

Helium, which has many uses including medical MRI imaging and as a rocket propulsion fuel, is in short supply around the world.   

The price of helium has increased by more than 160 per cent since 2017 as demand has grown and is expected to continue rising. Canada has the world’s fifth largest helium resources, and because it can be produced along with natural gas, Alberta could become a significant supplier.  

“In the past helium was mainly maybe a waste because it was not really captured or processed. Now if we find a good concentration of helium, the plan is to extract and process that helium,” Honarvar says.  

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Alberta organizations are answering the call to boost energy literacy among young people, while an industry executive is calling for nationwide energy literacy programming.  

Inside Education, a charity operating since 1985, educates K-12 students about Alberta’s natural resources sectors, including oil and gas, and the environment. The organization focuses on classroom programs and field trips that help students and teachers learn about impacts and innovation.  

The goal is inspiring students to a balanced, sustainable future for the environment, economy, and society, the organization says. 

“Energy forms and sources are a complex mix, and one doesn’t need to be at the expense of another,” says Steve McIsaac, executive director of Inside Education.  

“If we can be rowing in the same direction when it comes to helping people understand, I think that would go a long way.” 

Inside Education held its Youth Energy & Environment Leadership Summit in March, which included representatives from various industries, including the oil sands and renewables sectors. In attendance were conservation groups and representatives from Indigenous communities. 

In 2022, the organization reached 14,214 students with classroom programs, while 515 teachers attended professional development programs – 115 communities were reached. 

“The level of interest is substantial,” says McIsaac. “Young people are fundamentally disinterested in waiting for some magical ‘when I grow up’ scenario. They want to be engaged now.” 

More energy literacy programs are needed across Canada, says Brad Hayes, a geologist and president of Calgary’s Petrel Robertson Consulting. 

Part of the problem with energy literacy is that knowledge deficits are often correlated with regional blind spots, he says. Young people in Alberta may have insight into oil and gas, while young people in Ontario may know more about nuclear, wind and solar power. On the east coast, coal is more familiar than natural gas. 

According to a University of Calgary School of Public Policy report, energy literacy is more than just knowing a few things about where energy comes from and how it is delivered.  

“It also means having a firm grasp of the economic and environmental impacts, coupled with the trade-offs that are an inevitable part of energy production,” the school writes. 

Kim Adolphe, founder of Calgary-based SWIFT Learning, has her own ideas about energy literacy. SWIFT provides online training for students and others focusing on safety, mental health, and active living. 

The organization recently received funding for an energy literacy program that will cover topics like energy history, petrochemicals in everyday life, oil and gas innovation, energy types, and energy transformation. 

“I believe it is imperative, and our duty, to ensure Canadians have a sense of pride about the tremendous economic contributions, innovations, leading safety standards, and commitment to reducing carbon emissions by the oil and gas industry,” says Adolphe.  

“Canada is an energy leader, and in order to continue that leadership and legacy, we must educate our youth and counter some of the disinformation that’s widespread.” 

A lack of energy literacy could mean fewer people entering energy sector careers, says Adolphe.  

A University of Alberta course called 21st Century Energy Transition: How do we make it work? is a resource that’s available to anyone, says Hayes – noting the material is suitable for high school students. 

The Society of Petroleum Engineers Canadian Education Foundation also has energy literacy programs and learning material.  

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Vulcan County in southern Alberta, known for its ubiquitous Star Trek displays in the town of Vulcan, now has another claim to fame – the largest solar power facility in Canada.

The $700 million Travers Solar Project, owned by an Axium Infrastructure managed fund, looks like a scene from the venerated science fiction series – 3,330-acres of glass, steel and electronic gadgetry. “High Voltage” warning signs hang from perimeter security fences.

Located 130 kilometres southeast of Calgary, Travers has capacity to produce up to 465 megawatts (MW) – enough electricity to power over 150,000 homes under optimal conditions. The operation, which came online in 2022, could offset around 624,000 tonnes of emissions each year. The project has a 15-year power purchase agreement with online retailer Amazon for 400 MW – representing 86 per cent of capacity.

“One of the nice things with these renewables that have come to the county as of late is they make up for a shortfall in our [tax] assessment,” says Nels Petersen, chief administrative officer of Vulcan County.

The 1.3 million-panel project will generate around $3 million per year in taxes for the county, he says –needed money to help maintain the county’s 1,800 miles of gravel roads and other infrastructure.

“As the total assessment base grows, our taxes [on residents] are dropping,” says Petersen.

A section of the Travers Solar Project in southern Alberta. Photo by James Snell for the Canadian Energy Centre

There are three other major renewable energy projects in Vulcan County, which sees around 312 days of sunshine per year: the EDF Renewables and Enbridge Blackspring Ridge Wind Farm, 166 turbines with capacity to produce 300MW; the Buffalo Plains Wind Farm, under construction, 83 turbines with capacity to produce 514MW; and the planned Vulcan GP2 solar farm at 22MW.

In total, renewable energy projects in the county support around 20 long-term jobs. Construction workers are brought in from larger communities when needed.

Many new companies are exploring the possibility of developing more projects in the county, says Jason Schneider, reeve of Vulcan County.

“It’s a good thing,” he says. “You definitely don’t want to turn away development, but there is a point when you say, I don’t know how many more of these we can support.”

One of the concerns is the future reclamation of the projects, Petersen said.

Alberta takes lead in solar  

Alberta has taken a commanding lead in the current Canadian solar project pipeline, says Matthew Sahd, a research analyst with Wood Mackenzie Power & Renewables.

“The main driver of Alberta’s rise is the province’s deregulated electricity market, which helps more easily facilitate power purchase agreements from companies looking to reduce their emissions,” he says.

According to the Canadian Renewable Energy Association (CanREA), “Canada has only begun to scratch the surface” of its substantial wind and solar resources. By the end of 2022, there was nearly 15 gigawatts (GW) of operating wind energy capacity and over 4 GW of major solar. Canada has about 150 GW of total installed electricity generation capacity, according to the International Energy Agency.

“I am happy to see that, across Canada, the sector grew by an impressive 10.5 per cent in 2022,” says Phil McKay, CanREA’s senior director of technical and utility affairs. “Canada now has an installed capacity of more than 19 GW of utility-scale wind and solar energy, having added more than 1.8 GW of new generation capacity in 2022.”

Solar power is growing particularly fast, says CanREA – over a quarter of all the installed capacity in Canada was added in 2022. Western Canada is leading the charge, accounting for 98 per cent of total growth, with Alberta adding 1.39 GW and Saskatchewan adding 387 MW of installed capacity in 2022. Quebec contributed 24 MW, while Ontario contributed 10 MW, and Nova Scotia 2 MW.

Mytilineos SA, a Greek company, is kicking off a $1.7-billion project to build five solar power facilities in southern and central Alberta. Once up and running by 2027 they will have capacity to produce 1.4 GW – enough electricity for around 200,000 homes.

“Business conditions in Canada in general are good, and we feel more comfortable there than in the United States,” said CEO Evangelos Mytilineos in an interview with the Globe and Mail.

Renewables are an emerging source of employment, says CanREA – mostly in construction, but also long-term jobs in operations and maintenance. Wind and solar accounted for over 4,400 person-years of employment in 2022, having expanded by 86 per cent from 2,400 in 2021.

“And we are anticipating these employment opportunities to keep expanding exponentially as the renewables industry continues to grow,” says McKay.

Grid-scale energy storage

According to the International Energy Agency (IEA), more investment in energy storage is required around the world to address the challenge of the intermittency of renewable power – solar doesn’t work when the sun isn’t shining.

“The rapid scaling up of energy storage systems will be critical to address the hour‐to‐hour variability of wind and solar electricity generation on the grid, especially as their share of generation increases rapidly,” says the IEA.

Energy storage is the conversion of difficult to store power – like wind and solar – into energy that can be used in the future, says CanREA.

Lithium-ion batteries are currently the most scalable form of grid-scale storage, the IEA said in a 2022 report.

Energy storage increased across Canada by 30.5 per cent, or 50 MW in 2022, says CanREA. Alberta led the way with 40 MW – doubling its energy storage capacity in 2022.

Across the country, as of December 2022, Ontario had the most installed energy storage capacity, with 126 MW, having added 10 MW, while Alberta had 82 MW. British Columbia, Quebec, New Brunswick, Saskatchewan, and Prince Edward Island also have energy storage capacity, says CanREA.

“CanREA is working hard to dramatically accelerate and expand the deployment of wind, solar and energy-storage technologies—there are several policy, regulatory and infrastructure barriers that we think need to be addressed,” says Vittoria Bellissimo, CEO of CanREA.

Challenges with solar

A disadvantage of solar power is the disruption of local ecosystems during and after construction. Solar panels, which have an approximate life cycle of 30 to 35 years, also contain toxic materials.

“The decommissioning of solar facilities, more specifically solar modules, has become an industry concern as the solar market matures in North America,” says Sahd, noting large solar companies like Silicon Ranch – developing a project in Alberta – AES, and Orsted have signed agreements with SolarCycle, a Texas company aiming to recycle panels.

A large volume of discarded solar panels will soon pose a risk of “existentially damaging proportions” says a 2021 Harvard Business Review article – official projections say a large quantity of annual waste is anticipated by the early 2030s and could total 78 million tonnes by 2050.

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Introduction

In recent years, all forms of energy have played some role in the global economy, and nuclear energy is no different. Nuclear energy is unique in that it plays an important role in some countries, while in other countries it is less prevalent. Nuclear energy is essential in such as areas as electricity generation, medicine, industry, space exploration, and national security.

Decisionmakers are debating the role of various forms of energy production, generation and use in the energy mix. In this CEC Fact Sheet, we look at the role of nuclear energy in countries where it is in use as a source of primary energy.

Nuclear energy in the global primary energy supply

As of 2021, there were 437 operational nuclear power reactors in 32 countries, with the United States (U.S.) leading the way with 93 reactors. In Europe, France leads with 56 nuclear reactors.

In the Asia Pacific region, China has 53 nuclear reactors, Japan has 33, and South Korea has 24.

Across the world, 56 new reactors are under construction in 19 countries, with China leading the way with 16 facilities being built.

Canada had 19 reactors in operation as of December 2021 (see Table 1).

Source: IAEA, 2022

According to the International Energy Agency (IEA), nuclear energy accounted for around four per cent of the world’s primary energy¹ supply in 2021. However, the share of nuclear energy in primary energy varies widely by region.

In the 1990s, six per cent of the world’s primary energy came from nuclear energy. By 2021, just over four per cent of the world’s primary energy came from nuclear.

In Europe, the nuclear energy share was just over nine per cent in 2021. For North America, it was seven per cent. In Asia, the share has decreased from around four per cent in 1990 to around two per cent in 2021 (see Figure 1).

As noted above, the share of nuclear energy in primary energy varies widely by region due to factors such as energy policies, resource availability, and economic considerations. For example, some countries have abundant oil and gas reserves and may rely more heavily on these sources for their primary energy supply. In contrast, others may have more limited access to traditional energy sources and look to nuclear energy to diversify their energy mix

1. The source for primary energy takes many forms, including fossil fuels, renewables, and nuclear energy. Primary energy sources are converted to electricity, a secondary energy source.

Source: IEA Database, 2023 and BP Database, 2022

Nuclear energy and electricity generation

Nuclear energy plays an essential role in electricity generation, providing about 10 per cent of global electricity generation. From the first civilian nuclear electricity generation facility back in 1954, nuclear energy has come a long way.

According to the International Atomic Energy Agency (IAEA), world nuclear electricity production increased steadily between 2000 and 2021. In 2000, global nuclear electricity production was 2,443 Terawatt hours (TWh); by 2021, it had increased to 2,653 TWh.

According to the IAEA, as of December 2021, the top five countries producing electricity from nuclear energy were the U.S. (772 TWh), China (383 TWh), France (363 TWh), Russia (208 TWh), and South Korea (150 TWh). Other countries that produce significant electricity from nuclear power include the Ukraine, Germany, Japan, and Spain. Canada produced 87 TWh in 2021 (see Figure 2).

Source: IAEA, 2022

Nuclear power in Canada

Nuclear power plants have been producing electricity in Canada since the 1960s. As of 2022, four nuclear power plants operate in Canada. Of the four plants, three are in Ontario and one in New Brunswick.

According to data from the IAEA, Canada’s share of nuclear electricity production has remained relatively stable over the past few decades. In 1990, nuclear energy accounted for about 14.8 per cent of Canada’s electricity production; by 2021, this share had decreased only slightly to about 14.3 per cent.

Over the same period, Canada’s nuclear power production increased from 69.9 TWh in 1990 to 86.8 TWh as of 2021 (see Figure 3).

It is worth noting that nuclear energy remains an integral part of Canada’s energy mix, particularly in Ontario, where it is the largest source of electricity generation. Sixty per cent of Ontario’s power needs are met by nuclear energy.

Source: IAEA, 2022

Dependence on nuclear power

Several countries rely heavily on nuclear power to meet their electricity needs. France is the world’s most nuclear-dependent country, accounting for approximately 69 per cent of its electricity generation capacity. France has 56 nuclear reactors, making it the second largest in terms of the number of nuclear power plants after the U.S (see Table 1).

Of interest, the Ukraine relies heavily on nuclear power, accounting for around 55 per cent of electricity generation capacity. Ukraine has 15 nuclear reactors, making it one of Europe’s largest nuclear energy producers.

Nuclear power accounts for around 52 per cent of Slovakia’s electricity generation capacity. Slovakia has four nuclear reactors and plans to build two additional facilities.

Belgium relies on nuclear power for around 51 per cent of its electricity generation capacity.

Hungary obtains around 47 per cent of its electricity from nuclear power, with four reactors currently in operation.

South Korea generates around 28 per cent of its electricity from nuclear power, with 24 reactors currently operating.

As of 2021, Canada generates around 14 per cent of its electricity from nuclear power, with 19 reactors currently in operation.

The United States is the world’s largest nuclear power producer, with 93 nuclear reactors generating over 20 per cent of the country’s electricity (see Figure 4).

Source: IAEA, 2022

Global nuclear electricity generation capacity

Nuclear electricity generation capacity² remains a relatively small percentage of global electricity generation capacity and has declined steadily since the 2000s. The share of nuclear electricity generation capacity was 10 per cent in 2000. By 2021, it had decreased to five per cent (see Figure 5).

2. Electricity generation means the conversion of any energy sources into electrical energy. Electricity generation can be divided into two categories of energy: conventional and renewable generation. Conventional electricity producers uses energy sources such as oil, coal, gas and nuclear. Renewable electricity generators use wind, solar and hydro energy. Electricity generation capacity is the maximum electricity output an electricity generator can produce under specific conditions. The installed generation capacity specifies the maximum possible electricity generation that can be produced by the installation and usually provided in megawatts.

Source: Enerdata, 2022

The share of global electricity generation capacity from renewable energy sources such as hydro, wind, solar, geothermal, and biomass has increased marginally between 2000 and 2021.

Fossil fuel-based electricity generation capacity continues to dominate the global electricity generation mix, with coal, natural gas, and oil combined accounting for approximately 55 per cent of the world’s electricity generation capacity in 2021.

Across Asia, installed nuclear power generation capacity has increased as a percentage of the overall installed capacity from all sources. Between 2000 and 2021, Asia saw the highest jump at 74 per cent, followed by G20 countries³ at eight per cent. In America⁴, installed nuclear electricity generation capacity decreased by three per cent, while in G7 countries,⁵ installed nuclear electricity capacity decreased by about 17 per cent. The most significant decrease of 22 per cent was seen in Europe (see Figure 6).

3. The G20 countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, the United Kingdom, the United States, and the European Union.
4. America includes countries in North, South and Latin America.
5. The G7 countries include includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

Source: Author’s calculations derived from Enerdata, 2022

Conclusion

Overall, while global nuclear electricity generation capacity has increased, its growth has been slower than other types of electricity generation.

Countries and regions have different energy sources for their electricity generation, depending on resource availability, energy policies, and economic considerations.

Asia is becoming increasingly reliant on nuclear energy to meet its electricity needs. With so many Asian countries investing heavily in this form of power generation, it looks likely that the growth trend over the past 20 years will in the future.

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam and Lennie Kaplan at the Canadian Energy Centre (www.canadianenergycentre.ca). The authors and the Canadian Energy Centre would like to thank and acknowledge the assistance of two anonymous reviewers in reviewing the original data and research for this Fact Sheet.

References (all links live as of April 12, 2023)

British Petroleum Company (2022), BP Statistical Review of World Energy in 2022: 71st Edition <https://on.bp.com/3nuuApW>; Canada Nuclear Safety Commission (n.d.),<https://bit.ly/3G3XKTn>; Nuclear power plants Enerdata (2023), Power Plant Tracker Database <https://bit.ly/3xfgOdF>; International Atomic Energy Agency (IAEA) (2004), Fifty Years of Nuclear Power – The Next Fifty Years, Non-serial Publications, IAEA, Vienna; IAEA (2022), Nuclear Power Reactors in the World, Reference Data Series No. 2, IAEA, Vienna <https://bit.ly/40Hokdn>; International Energy Agency (IEA) (2023) World Energy Statistics Database <https://bit.ly/31ca8fp>; Ontario Power Generation (n.d.), Nuclear power <https://bit.ly/3Zshy9P>.

Creative Commons Copyright

Research and data from the Canadian Energy Centre (CEC) is available for public usage under creative commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

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Overview

Trade is an essential component of Canada’s economic activity, accounting for about two-thirds of the economy and employing 3.3 million people. In 2021, Canada’s total exports from all industries were worth $631.5 billion, with oil and gas extraction (not including oil sands) accounting for 18 per cent of Canadian exports (see Table 1).

Policy discussions about how the Canadian economy should pivot away from its most significant export product – oil and gas (which brings in billions of dollars in export revenues to Canada) – towards renewable energy products calls for a closer scrutiny. Canada’s share of global trade in renewable energy products can be an excellent barometer from which to gauge where Canada stands.

This Fact Sheet provides a snapshot of Canada’s international trade in two major renewable energy products: solar panels and wind turbines. We analyze exports and imports of these products over the past decade and identify the significant trading partners for each. We also indicate which countries are the top exporters of solar panels and wind turbines.

Source: Government of Canada, Trade Data Online

Trade in renewable products: Canada imports more solar panel and wind turbine products than it exports

In 2021, Canada imported solar panel products with a value of CA $653 million and wind turbine products with a value of CA $91 million. The value of the solar panels and wind turbines Canada imported was much higher than the CA $260 million export value for both products (see Figure 1).

Source: Government of Canada, Trade Data Online

Canada’s imports of solar panel products increased from CA $512 million in 2012 to CA $653 million in 2021, an increase of nearly 28 per cent. In contrast, the country’s imports of wind turbine products decreased drastically after 2014, falling to just CAD $91 million in 2021 (see Figure 2).

Source: Government of Canada, Trade Data Online

In 2012, the value of solar panel products that Canada exported was CA $163 million. The value of these exported products reached a high of CA $410 million in 2015, before falling to CA $259 million in 2021. Meanwhile, between 2012 and 2021, the value of wind turbine products exported was relatively negligible; less than CA $1 million worth in 2021 (see Figure 3).

Source: Government of Canada, Trade Data Online

Import and export partners for solar panels

Vietnam (27 per cent) and China (21 per cent) combined were the origin of most imports of solar panels to Canada in 2021. The largest Canadian export destination for solar panels was the US (70 per cent) in 2021 (see Figure 4a and Figure 4b).

Source: Government of Canada, Trade Data Online

Source: Government of Canada, Trade Data Online

Wind turbines: Import and export partners

China (48 per cent) and Germany (37 per cent) were the primary suppliers of the wind turbine products Canada imported. The US was the primary destination of the relatively negligible wind turbines exports from Canada (see Figures 5a and 5b).

Source: Government of Canada, Trade Data Online

Source: Government of Canada, Trade Data Online

Major exporters of solar panels and wind turbines

China, Malaysia, and Vietnam were the largest worldwide exporters of solar panel products in 2021. China exported US $33.5 billion of solar panel products, followed by Malaysia at US $4.9 billion, and Vietnam at US $4.8 billion (see Figure 6).

Source: UN Comtrade

The top three exporters of wind turbine products worldwide were Germany (US $2.46 billion), Denmark (US $1.94 billion), and China (US $1.44 billion) (see Figure 7).

Source: UN Comtrade

Conclusion

Asian countries, particularly China, Malaysia, and Vietnam, are the largest exporters of solar panel products while European countries such as Germany and Denmark are the largest exporters of wind turbine products.

To date, Canada’s export of solar panel and wind turbine products is still relatively small compared to other significant exporters.

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam and Lennie Kaplan at the Canadian Energy Centre (www.canadianenergycentre.ca). The Harmonized System (HS) product code used in the fact sheet for wind turbines is HS 850231 (electric generating sets—wind-powered) and for solar panels is HS 854140 (photosensitive semiconductor devices, photovoltaic cells, and light emitting diodes). All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using source data. The authors and the Canadian Energy Centre would like to thank and acknowledge the assistance of two anonymous reviewers in reviewing the data and research for the initial edition of this Fact Sheet.

References (All links live as of January 31, 2023)

Government of Canada (2022), Trade Data Online <https://bit.ly/3WYouep>; Government of Canada (n.d.). “Just Transition” <https://bit.ly/3vN2eZ0>; Government of Canada (2020), Canada’s State of Trade <https://bit.ly/3GAM5Lk>; UN Comtrade database (n.d.), International Trade Statistics <https://bit.ly/3vQmPeR>.

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