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Chapter 1. Introduction
The NEB has been regularly producing long-term energy supply and demand projections since 1967. The Energy Futures series explores how possible energy futures might unfold for Canadians over the long term under a variety of scenarios. Energy Futures employs economic and energy models to make projections based on a certain set of assumptions given what we know today about technology, energy and climate policies, human behaviour and the structure of the economy. This analysis is not a prediction of what will take place, nor does it aim to show how specific goals, such as Canada’s climate targets, will be achieved.
This report, Canada’s Energy Future 2018: Energy Supply and Demand Projections to 2040(EF2018), is the latest edition of this series. EF2018 considers three core cases and one technology case:
- The Reference Case is based on a current economic outlook, a moderate view of energy prices and technological improvements, and climate and energy policies announced and sufficiently detailed for the modeling at the time of analysis.
- The High and Low Price Cases address the uncertainty of future crude oil and natural gas prices.
- The Technology Case pushes past the policy and technology boundaries specific to the Reference Case and includes greater global climate policy ambition and market outcomes. It provides one potential view of what a faster transition enabled by stronger long-term carbon policy, faster uptake of technologies such as electric vehicles, and lower cost of renewables would mean for Canada’s energy future.
Figure 1.1: Overview of Cases in EF2018
This graph shows the break down between the Reference, High Price, Low Price, and Technology Cases in Energy Futures 2018. The Reference Case is the baseline scenario. The Low and High Price Cases advance on the Reference Case by accounting for oil and natural gas price uncertainty. The Technology Case advances on the reference case by incorporating the impacts of a global shift to a low carbon economy.
Several assumptions underpin the Reference, High and Low Price Cases:
- Infrastructure and markets: In the short-to-medium term, pipeline capacity remains constant but gradually increases. In the long term, infrastructure is in place to move energy production and markets are foundFootnote 1.
- Goals and targets: Unless provided with a definitive path for achieving them, climate and other related goals and targets are not explicitly modelled.
- Policies: Climate and other relevant policies with sufficient detail to model or make assumptions on are included. This includes various simplifying assumptions to reflect carbon pricing systems.
- Recent climate policy developments: Table A.1, found in Appendix A, describes many recent climate policy developments and indicates what policies are included in the EF2018 analysis.
- Technological change: These cases assume moderate improvement. This includes efficiency and costs reductions of renewables in line with current trends.
In addition to the Reference and High/Low Price Cases, EF2018 introduces the Technology Case that explores the Canadian energy outlook in a world where technology improvements, combined with increased global policy action on climate change, lead a shift towards a low carbon economy. This case is built by defining a global context, and then developing specific assumptions for Canada within that context on factors such as adoption of emerging technologies like electric vehicles. It is important to note that it is unclear which technologies will gain wider adoption in the future, and this scenario is just one example among many possible pathways. It should be noted that this scenario is not a prediction or recommendation of certain policies, technologies, or outcomes.
Over the projection period, it is likely that developments beyond the realm of normal expectations, such as geopolitical events or technological breakthroughs, will occur. Likewise, new information will become available and trends, policies, and technologies will continue to evolve. EF2018 makes several simplifying assumptions on current policies, as well as future technology trends. This report should not be taken as an official or definitive impact analysis of any specific policy initiative. Readers of this analysis should consider the projections a baseline to support ongoing discussions of Canada’s energy future, not a prediction of what will take place in the future.
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