Market Snapshot: Canada’s retiring coal-fired power plants will be replaced by renewable and low-carbon energy sources

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Release date: 2020-01-29

Coal-fired power generation declines considerably in the latest Canada Energy Regulator’s outlook Canada’s Energy Future 2019 (EF2019). Over the projection period, the share of coal-fired power generation declines from 16% in 2005 to less than 1% in 2040.

Currently 4 provinces operate coal-fired power plants: Alberta, Saskatchewan, New Brunswick, and Nova Scotia. Over the past few years, the federal government has put in place strict emissions requirements that will require coal-fired power plants to be shut down at the end-of-life or retrofitted with carbon capture and storage technology. Similar standards apply to gas-fired power generation, but, since gas-fired power plants emit fewer GHGs than coal-fired power plants, only gas plants with lower efficiencies would need to close.

Figure 1. Canadian coal electricity generation by region to 2040

Source and Description

Source: EF2019

Description: This graph shows projected coal-fired generation by province in the EF2019 Reference CaseFootnote 1. Alberta's coal-fired generation decreases from 43 581 GW.h in 2005 to zero in 2029. Nova Scotia's coal-fired generation decreases from 8 375 GW.h in 2005 to 1 015 GW.h by 2040. New Brunswick’s coal-fired generation decreases from 3 100 GW.h in 2005 to 120 GW.h by 2040. Saskatchewan's coal-fired generation decreases from 13 158 GW.h in 2005 to 172 GW.h by 2040.

All 4 provincesFootnote 2 are deploying various, long-term strategies to replace retiring coal-fired power generation. In Alberta, most coal units are projected to be converted to run on natural gas. The conversion starts as early as 2021, with the last unit expected to be converted by 2029. The efficiency of these converted units will dictate how long they are allowed to operate.

Saskatchewan currently has one coal-fired generation station that is equipped with carbon capture and storage technology.Footnote 3 In the projection period, Saskatchewan’s retiring coal is replaced by a growing share of renewables. By 2030, renewables supply over 40% of the province’s electricity demand. Saskatchewan also plans to purchase over 300 MW of hydroelectric power from Manitoba starting in 2022. New Brunswick and Nova Scotia plan to add wind, expand hydro units, and purchase hydroelectricity from Newfoundland and Labrador, who is now connected to their electricity markets by the Maritime Link transmission line.

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