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Canada’s Energy Future 2017: Energy Supply and Demand Projections to 2040
Mike Johnson
Technical Leader, Energy Supply Team
Solar Canada
December 4, 2017
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• The NEB’s Energy Futures (EF) reports provide long-term energy supply and demand projections for Canada
• Typically include a baseline “Reference Case” and some scenarios/sensitivities covering key uncertainties
• Recent EF reports have included scenarios on high/low oil and gas prices, pipeline export capacity, and LNG export volumes
• EF 2017 focuses on longer term climate policy developments and technological trends
National Energy Board and Energy Futures
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• Themes of energy, environment and technology run throughout
• Talk of EVs, fuel cells, and the future of oil sands
• Underestimates coal production, overestimates nuclear
generation
Some highlights from the 1967 report “Energy
Supply and Demand Forecast: 1965-1985”
Canadian Power Generation – 1965 and 1985
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EF 2017 Scenarios
Reference Case
• Currently Announced Policies
• Consensus view prices, econ growth
• Carbon price flat (nominal) post 2022
Higher Carbon
Price Case
• Increasing carbon price post 2022
• Assumes this is driven by greater global climate action
• Lower crude oil price
Technology Case
• Explores technology uncertainty
• Higher Carbon Price + greater adoption of select technologies
• Lowest crude oil price
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• Carbon Prices o Chart shows minimum federal floor
in nominal and CN2016$, some
provinces are currently higher.
Carbon Price and Technology Case Assumptions
• Technology Case Includes:o Higher long term carbon pricing
consistent with the Higher Carbon Price Case
o Low solar/wind power costs
o Improved renewable integration
o Faster uptake of EVs in passenger transport
o Greater adoption of steam-solvents in oil sands
o Greater electrification of space/water heating in buildings
o Increased use of CCS in coal-fired generation
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• Greater decline in the
Technology Case
than in the High-
Carbon and
Reference Cases for
solar
Capital costs for utility-scale solar were assumed to
continue declining over the long term
Source: NREL, EIA
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• Better technology
means more
penetration of EVs
into markets
o Thus, more
electricity demand
• More heat pumps for
residential and
commercial heating
and cooling
Also assumptions about demand-focused
technology in the Technology Case
EV Share of new passenger-vehicle purchases
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Key Finding 1:
The Energy Futures
2017 Reference Case
is the first baseline
projection in recent
Energy Futures
reports where
Canadian fossil fuel
consumption peaks
within the projection
period.
Canadian Fossil Fuel Use Projections, Recent Energy Futures Reports, Reference Case
Projected Peak is 2019
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Key Finding 2:
Canadian fossil fuel
consumption in the
Higher Carbon Price
Case is 8% lower
than in the
Reference Case,
and 13% lower in
the Technology
Case by 2040.
Fossil Fuel Use, All Cases
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Key Finding 3:
Renewable capacity
grows quickly, with
wind doubling and
solar more than
tripling by 2040 in the
Reference Case.
Technology Case
assumes lower wind
and solar costs,
improved variable
renewable integration.
Solar and Wind Capacity, Reference and Technology Cases
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Key Finding 4:
Despite different
energy outcomes,
economic growth is
similar in all three
scenarios in Energy
Futures 2017.
Per cent change in Various Indicators compared to the Reference Case by 2040, Higher Carbon Price and Technology Cases
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Key Finding 5:
Future policies and
technology trends,
both domestically and
globally, will shape
Canada’s sustainable
energy future.
The cases do not represent
a ceiling on Canada’s
potential for GHG emission
reductions, but illustrate the
impact climate policy and
technology can have on
Canada’s energy system.
Total Energy Use, All Cases
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• Electric demand increase
o EVs
o Switching to heat
pumps in provinces
not dominated by
electric heating
systems
• Electric demand decrease
o Switching to heat
pumps in provinces
dominated by electric
heating systems
• Overall: demand increases
Aggregate Impact on Electric Demand of
Technology Case Assumptions
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• Based on
existing policy,
we’ll see little
contribution from
it beyond 2030
Coal-fired power generation doesn’t have much
of a future in Canada
Coal-fired generating capacity by province,
Reference Case
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Generating Capacity by Fuel, 2015 and 2040, All Cases
• By 2040, total capacity in
the Technology Case is
8.5% higher than the HCP
Case, and 41% higher than
2015 levels
• In the Technology Case,
wind and solar make up
27% of Canada’s capacity
mix in 2040, compared to
19% in the Reference and
HCP cases, and 9% in
2015.
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• Much lower capital
costs for solar in the
Technology Case lead
to much higher
generation
o Over 40 TW.h in
2040
o Largely comes at
expense of coal
and natural gas
Generation is different than capacity, however
Generation by select fuels, 2015 and 2040
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Keep in mind that the NEB has underestimated solar
capacity in its past projections
• Projections for these
require a lot of policy
assumptions, and we
didn’t have much
guidance in the past
• More guidance now,
but how policy will
unfold to incorporate
more renewables into
the mix is still unknown
and there are many
pathways
Projected, cumulative solar capacity – Prior EF versions
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• Third edition of Energy Futures released as visualizations
• Includes a brand new visualization to explore changes in energy mix
• All data available in appendices
Energy Futures more than just a report, but a
significant data source as well
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• Renewables report (version 3)
FYI, the NEB has other projects in the works too
• Canadian solar-power supply costs
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• Higher carbon prices will move the
needle on Canadian fossil-fuel
demand, but improving solar and
wind technology will help move it
even more
• We’ll see more penetration of solar
into Canadian energy markets,
especially if costs keep falling like
they have been
Conclusions
Contacts: [email protected]@neb-one.gc.ca