Canada - Country Commercial Guide
Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-08-20

Overview

Canada’s total installed electricity generation capacity is approximately 145 GW in 2017 (the most recent figure available). It is projected to reach 170 GW in 2035. The total electricity generated in Canada 2020 was 635.6 TWH, with a stable demand just 0.8% lower than previous year, despite the impact of the COVID-19. The slowdown of some services and manufacturing segments were most likely compensated by the increase in consumer demand.

Canada is among the world’s top countries relying predominantly on clean hydro energy. In 2020, the electricity generation composition was hydro 60%, nuclear 14.6%, coal 12.7%, natural gas 6.6%, and renewables wind 5.7% and solar 0.4%. Hydro and wind gained another 1% approximately. Other sources like geothermal, tidal waves, etc. contributed with less than 0.2%. Coal-based power generation has been eliminated in Ontario and Québec. British Columbia, Manitoba, Newfoundland and Labrador, Prince Edward Island and Yukon systems rely on hydro for 89% to 95% of power generation. Alberta and Saskatchewan are the only provinces that rely primarily on fossil fuels (more than 83% of generation).

Canada is one of the leading countries globally utilizing renewable energy: hydro, wind, solar, biomass, along with significant developments in geothermal and marine energy. Renewable energy represented approximately 66% of total electricity generation in 2020. According to the Canada Energy Regulator (CER), renewables like wind, biomass, geothermal, and solar are projected to reach 12% of total power generation by 2035. Canada ranks as the United States’ second leading renewable energy market, after Mexico. Wind is Canada’s second largest source of renewable energy (after hydro). Installed wind energy capacity increased during the last three years by an average of approximately 4.5% per year and reached 13,413 MW at the end of 2019. The leading provinces for wind are Ontario (5,436 MW), Québec (3,882 MW), and Alberta (1,685 MW). The total solar photovoltaic (PV) power installed capacity for electricity generation was approximately 2,600 MW by the end of 2019.

The total Canadian electricity system market evaluation is defined by 20 HS codes at the 4-digit level covering equipment and materials for power generation, transportation, and distribution such as nuclear reactors, power boilers, turbines and turbine generator sets, electrical equipment, and related auxiliary equipment, materials, and parts. Based on this definition, the total apparent market size in 2020 was over US$20.6 billion, with approximately US$10.4 billion in local production and over US$8 billion in imports from the U.S., about 10% decrease from previous year most likely as an impact of COVID-19. The table below provides more detailed statistics of the apparent market.

 Table: Canada Energy Market Data (US$ Millions)

US$ Million

2018

2019

2020

2021 (Estimate)

Total Local Production

13,535

11,658

10,436

12,160

Total Exports

9,077

8,964

7,727

9,272

Total Imports

20,251

20,841

17,897

21,118

Imports from the US

9,254

9,347

8,001

9,442

Total Market Size

24,710

23,535

20,606

24,006

Exchange Rates

1.2957

1.3269

1.3415

1.3415

[Total market size = (total local production + imports) – exports]

Units: $ millions

Source: Statistics Canada reports

The market drivers are primarily real-time domestic operational needs and provincial policies to align the overall installed capacity to cover the forecasted demand and to transition to renewable energy sources. The regulatory environment is centered at the provincial level, which has full authority over local electrical system regulations, policies, and enforcement. All jurisdictions aim to reduce existing coal-based generation and replace it with gas and renewable energy. International trade and Canadian currency trends are two additional drivers.

Impacts of COVID-19

The impact of COVID-19 affected many sectors of the economy, especially services and manufacturing. The consumer sector demand seems to have recorded a slight increase. Regulatory bodies at federal and provincial levels are committed to maintain the entire system of power generation, transmission, and distribution, operational at full capacity. Operational costs are expected to decrease but maintenance and large nuclear reactor refurbishment programs are not discontinued.

The January – May 2021 data show a significant increase from same period last year.

The market maintains many opportunities.

Leading Sub-Sectors

The following power generation and renewable energy sub-sectors recorded significant increases from

January through May 2021, with multiple opportunities for U.S. exporters.

For specific HS product groups, the value of Canadian imports in 2020 is listed in parentheses:

· Pumps for Liquids, Liquid Elevators (US$2.26 billion)

· Switchgear Protecting Electrical Circuits (all voltages) (US$2 billion)

· Steam, Vapor Generating or Water Boilers (excl. central heating boilers) (US$65 million)

· Electric Generating Sets, Rotary Converters and Parts (US$930 million)

· Electrical Transformers, Static Converters and Inductors (US$1.84 billion)

· Systems and Components for Refurbishment of 8 nuclear reactors

· Wind Turbines, Tower Sections, Rotor Blades, Casting and Forgings and Transformers

· Gears and Generators for Wind Turbines

· Hydro Energy Turbines and Equipment

· Smart Grid Connection and Energy Monitoring Equipment and Software Applications

· Engineering, Construction, and Logistics Services

Opportunities

There are significant opportunities that make Canada a top market for U.S. companies which are driven by existing assets and plans for further development. Between 60% and 70% of power generation facilities are in process to be replaced or upgraded during the next 10-15 years. Total investment in the power generation sector is forecasted to reach US$290 billion by 2030, more than US$195 billion allocated to power generation stations, with the remainder dedicated to the transmission and distribution segments.

More than US$20 billion in investment was committed for nuclear reactors refurbishments and about half of it is completed. The federal government and the provincial governments have dedicated funding programs. The Canadian Small Modular Reactor (SMR) Roadmap is targeting at least one operational SMR by 2026 and at least three Provinces are planning to cooperate and operate SMRs.

The 2019 Federal Government Budget indicates approximately US$14.8 billion in funding for infrastructure projects, including those that reduce greenhouse gas emissions, deliver clean air and safe water systems, and promote renewable power. Examples include US$22.3 million for the Clean Wind Power project in Northwest Territories and US$22.2 million for the Renewable Tidal Energy project in Nova Scotia. The 2020 budget was delayed, and the 2021 budget is expected to further support infrastructure development.

Opportunities for delivering all types of equipment, installations, components, and materials for all segments, from power generation and transmission to local distribution, exist through various projects across Canada including:

· Bruce Power Nuclear Generation Plant, Tiverton, ON – refurbishment of 6 reactors

· Darlington Nuclear Generation Plant, Darlington, ON – refurbishment of 3 reactors

· Canadian Nuclear Laboratories - first SMR (5 MW electricity) operational by 2026

· Darlington New Nuclear Project (targeting SMRs selection by 2022)

· Lake Erie Connector Project - 320KV line ON-PA (completion 2024)

· Revelstoke Dam Hydro Unit 6, 300MW (installation pending)

· New transportation lines and distribution stations, substations (large number of projects)

· Refurbishments and upgrades of existing power generation and distribution facilities

Resources

Major Events and Trade Shows in Canada

· Electricity Transformation Canada, Toronto, Ontario, November 17-19, 2021

· Solar Power International, New Orleans, Louisiana, September 20-23, 2021

· APPrO Annual Canadian Power Conference (Virtual), November 29-30, 2021

· Canadian Nuclear Association Conference and Trade Show, (Virtual), September 15-17, 2021

Canadian Government

· Canada’s 2021 Budget

· Innovation, Science and Economic Development Canada

· Canada Energy Regulator

· Statistics Canada

· Ministry of Energy of Ontario

· Ministry of Energy and Natural Resources Québec

Industry Associations

· Canadian Electricity Association

· Canadian Energy Efficiency Alliance

· Waterpower Canada

· Canadian Renewable Energy Association

· APPRO – Association of Power Producers of Ontario

· B.C. Sustainable Energy Association

Commercial Service

For additional information on this sector, please contact Commercial Specialist Stefan Popescu at Stefan.Popescu@trade.gov or by phone at (416) 595-5412 ext. 223.