Overview

Canada’s total installed electricity generation capacity was approximately 149 GW in 2021. It is projected to reach 170 GW in 2035. The Canada Small Modular Reactors (SMR) Roadmap will be a relevant component. The total electricity generated in Canada in 2021 was 627.7 TWH, approximately 1.1 % lower than previous year.

Canada is among the world’s top countries that predominantly rely on clean hydro energy. In 2021, the electricity generation composition was almost unchanged: hydro (60.1%), nuclear (13.9%), fossil fuels (21.9%), and renewables wind (5.8%) and solar 0.4%. Other sources, such as geothermal, tidal waves, etc. contributed with less than 0.2%. British Columbia, Manitoba, Newfoundland and Labrador, Prince Edward Island and Yukon systems rely on hydro for 89% to 95% of power generation. Coal-based power generation has been eliminated in Ontario and Québec. Alberta and Saskatchewan are the only provinces relying on fossil fuels (over 83%).

Renewable energies, like hydro, wind, solar, biomass, along with significant developments in geothermal and marine energy, remain stable, representing approximately 66% of total electricity generation in 2021. According to the Canada Energy Regulator (CER), renewables are projected to reach 12% of total power generation by 2035. Wind is Canada’s second-largest source of renewable energy (after hydro) with an installed capacity 13,588 MW in 2021, with leading provinces Ontario (5,436 MW), Québec (3,882 MW), and Alberta (1,685 MW). The total solar photovoltaic (PV) power installed capacity was over 2,600 MW in 2021.

The total 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 2021 was over US$23.4 billion, with approximately US$11.7 billion in local production. Import from U.S. was US$9.4 billion, an increase of about 17.5% from the previous year.

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

Units: $ millions

Source: Statistics Canada reports, Bank of Canada annual average

The market drivers are primarily real-time domestic operational needs, including economic growth and the growing demand for electric vehicles, in addition to provincial policies to cover the forecasted demand and the transition to renewable energy sources. Provinces regulate energy pricing and have 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.

Impact of COVID-19

The impact of COVID-19 affected many sectors, especially services and manufacturing. Recently, electricity demand in the consumer sector 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. The maintenance and large nuclear reactor refurbishment programs continue.

Leading Sub-Sectors

The following power generation and renewable energy sub-sectors recorded significant increases from January through March 2021, with multiple opportunities for U.S. exporters.

For specific HS product groups, the value of total imports in 2021 is listed in parentheses:

• Pumps for Liquids, Liquid Elevators (US$2.5 billion)
• Switchgear Protecting Electrical Circuits (all voltages) (US$2.1 billion)
• Steam, Vapor Generating or Water Boilers (excl. central heating boilers) (US$93 million)
• Electric Generating Sets, Rotary Converters and Parts (US$1 billion)
• Electrical Transformers, Static Converters and Inductors (US$2.1 billion)
• Systems and Components for Refurbishment of 8 nuclear reactors
• Components and ancillary balance of plant equipment for Small 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

The Canadian energy sector is a top market with significant opportunities for U.S. companies driven by existing assets and plans for further development. Between 60% and 70% of power generation facilities are in process of being 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, with more than US$195 billion allocated to power generation stations, and the remainder dedicated to the transmission and distribution segments.

More than US$20 billion in investment is committed to the refurbishment of the large nuclear reactors fleet with around half of the refurbishments completed.

The Canadian Small Modular Reactor (SMR) Roadmap is the Canadian strategy for nuclear power development and is supported by the federal government. Four provinces (Ontario, New Brunswick, Saskatchewan, and Alberta) signed a Memorandum of Understanding for the implementation of the program and commissioned study which identified three streams to be pursued:

1. On-grid SMRs of up to 300 MWe capacity with proven, safe technology, for base load.
2. Off-grid Micro SMRs, 5-20 MWe, to replace Diesel (remote communities, mining, etc.)
3. On and off grid 4th Generation technologies SMRs for further deployment

A vendor for a SMR 300 MWe has been selected, and a Micro SMR 5 MWe is contracted with building in progress. Both reactors will be operational before 2030.

The 2022 federal budget proposes C$120 million (approximately US$93.25 million) to back SMRs, and C$69.9 million (approximately US$54.32 million) for Natural Resources Canada to undertake research on waste, support the creation of a fuel supply chain, strengthen international cooperation agreements, and enhance domestic safety practices. The Canada Infrastructure Bank (CIB) will also broaden its role in supporting the SMR Roadmap. The federal budget also includes amounts for various renewable energy projects.

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 - first SMR (300 MW electric) vendor selected
• 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, October 26-28, 2022
• Solar Power International, New Orleans, Louisiana, September 19-22, 2022
• Canadian Nuclear Association Conference and Trade Show, February 2022 TBD

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 Contacts

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.