Market Snapshot: Why Canada is one of the world’s largest electricity consumers
Release date: 2022-08-31
Despite being the 39th-largest country in terms of population, in 2020 Canada was the fourth-largest consumer of electricity on a per capita (per person) basis, and the sixth-largest producer.
Figure 1: Per capita electricity consumption, by regionFootnote1
Source and Description
Source: BP Statistical Review of World Energy & Ember (compiled by and retrieved from Our World in Data)
Description: This chart shows per capita electricity consumption by country and region, from 2005 to 2020. Consumption is measured in kilowatt hours (kWh) per capita. Iceland has the largest per capita electricity consumption in the world, at 56,059 kWh per capita in 2020. Canada ranked fourth at 16,698 kWh.
What drives high electricity consumption?
Several factors are responsible for the high per capita electricity consumption in parts of northern Europe (Iceland, Norway, Sweden, and Finland), the Middle East (Bahrain, Kuwait, Qatar, and the United Arab Emirates), and North America (Canada and the United States). Many or all these countries are characterized by:
- the strong presence of energy-intensive industries;
- high demand for heat when weather is cold, or for air conditioning when weather is hot; and
- high income and purchasing power, along with affordable electricity.
Drivers of Canadian electricity use
These characteristics, which are listed in no particular order, all apply to Canada. We have numerous large, electricity-intensive economic sectors compared with other high-income countries. This is the case for Canada’s manufacturing, pulp and paper, oil and gas extraction, and metal and non-metallic mineral product manufacturing sectors, including aluminum. Canada’s largest consuming sector for electricity in 2019 was industrial at 239 terawatt hours. The residential and commercial sectors consumed 171 terawatt hours and 150 terawatt hours, respectively.
Canada is one of the coldest countries in the world, with a population-weighted average temperature of 1.6°C in 2021 (Figure 2). This average reflects the fact that most Canadians live in the south of the country close to the border with the United States, where temperatures are relatively higher than elsewhere in the country. The national average, when weighted by the geographical size of different regions instead of where people live, was -3.7°C. This difference is mainly due to weighting the vast and cold northern regions differently. Cold temperature increases household and business need for heat. Heating is energy-intensive, and over 41% of primary household heating systems in Canada rely on electricity (see Figure 3). High electricity demand also occurs during the summer months for cooling.
Figure 2: Average temperature by country (2021)Footnote2
Source and Description
Source: Climate Knowledge Portal – World Bank, and CER calculations.
Description: This map shows average temperatures by country for 2021. The countries in blue are on average colder, while the countries in orange are on average warmer.
Another reason for Canada’s high per capita electricity consumption is that electricity is generally more affordable than in other countries from the Organization for Economic Co-operation and Development (OECD).Footnote3 As the price of a product lowers, demand tends to increase. As a result, electricity consumers in provinces with low electricity prices tend to consume more. This can be due to a higher reliance on electricity for heating systems (see Figure 3), industrial processes, and, increasingly so, electric vehicles.
Canada’s high per capita electricity consumption is also due to high incomes and purchasing power, and large average house sizes.
Figure 3: Primary heating systems by province and type of energy (2019, % of households)
Source and Description
Source: Statistics Canada, Table 38-10-0286.
Description: This chart shows primary heating systems by province and type of energy in Canada in 2019. Each bar shows the percentage of households relying on the specific type of energy. Not all households have heating systems, and some households have two. The blue columns indicate the reliance on electricity for heating, the orange on natural gas, and the red on other. In 2019 in Canada, 41% of households relied on electricity to heat their homes.
Canada’s electricity has high share of non-emitting generation
Finally, while Canada is a major consumer of electricity, generation emits comparatively less greenhouse gases (GHGs) than the global average, with 81% of generation coming from non-emitting sources in 2019.
The GHG intensity of Canada’s electricity grid, measured as the GHGs emitted in the generation of electric power, was 120 grams of CO2e per kilowatt hour (g of CO2e/kWh) in 2019. In comparison, it averaged 253 grams of CO2e/kWh in 2019 in the European Union and 225 grams of CO2e/kWh in the United Kingdom. The U.S. electricity grid greenhouse gas intensity was 386 grams of CO2e/kWh in 2020.
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