Canada is entering a pivotal phase of expansion in the power sector as federal tax credits, the phasing out of coal-fired generation and the accelerating electrification of industry are driving substantial investment into wind, solar and nuclear power. However, realising the full potential of these clean energy additions will require overcoming persistent interprovincial transmission bottlenecks and modernising regional grids, says GlobalData, a leading intelligence and productivity platform.
GlobalData’s latest report, “Canada Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035”, reveals that the country’s cumulative installed power capacity is projected to grow at a compound annual growth rate (CAGR) of 2.1 per cent between 2025 and 2035. Over this period, non-hydro renewable capacity – predominantly wind and solar PV – is forecast to increase its share from 20.6 per cent to 31.4 per cent of total capacity, as national electricity demand grows at a CAGR of 1.7 per cent, driven by the electrification of heating, the adoption of electric vehicles and the expansion of large-scale data centres.
Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: “Canada already operates one of the world’s cleanest power systems, underpinned by vast provincial hydropower resources and an established nuclear fleet. The next decade will mark a significant evolution: non-hydro renewables will drive the majority of net capacity additions, led by onshore wind and utility-scale solar, whilst major nuclear life-extension programmes and small modular reactor deployments will help maintain baseload stability.”
Despite strong fundamentals in the clean energy sector, the market faces structural coordination challenges. Electricity planning remains constitutionally divided across 10 distinct provincial jurisdictions, meaning that provincial grids are often connected far more extensively via high-voltage interconnectors to regional markets in the US than to neighbouring Canadian provinces.
Saibasan adds: “A fragmented grid landscape remains Canada’s main infrastructure bottleneck. Surplus low-carbon generation in provinces such as Quebec, Manitoba and British Columbia cannot easily be channelled to decarbonise fossil-fuel-reliant systems in Alberta or Saskatchewan due to limited east-west transmission capacity. Strengthening interprovincial interconnections and speeding up regional transmission approvals are essential for balancing high volumes of intermittent wind and solar power without causing localised grid congestion or curtailment.”
Policy mechanisms are actively reshaping investment conditions. The federal government’s Clean Economy Investment Tax Credits—offering a 15 per cent credit for clean electricity and interprovincial transmission, and up to 30 per cent for clean technologies including wind, solar, storage and small modular reactors—provide vital fiscal support. Together with the federal Clean Electricity Regulations, coal phase-out rules and industrial output-based carbon pricing, these measures create a robust financial framework for zero-carbon generation.
Saibasan concludes: “Canada has an extensive project pipeline, high-quality resources and an advantageous position as a net exporter to cross-border US markets. To double the supply of clean electricity by 2050 whilst ensuring it remains affordable for ratepayers, policymakers and provincial utilities must focus on coordinated transmission expansion, streamlined project permitting and long-term equity partnerships with Indigenous communities.”
