Canadian energy demand trends towards lower-carbon scenario

In its report on Canadian energy demand, CER noted that demand for oil and coal have fallen while natural gas demand is increasing. Alberta Energy Regulator photo.

This article was published by the Canada Energy Regulator on April 15, 2020.

Over the past 12 years, Canada’s demand for coal and oil have been more aligned with the lower carbon scenario projected in 2007’s Canada’s Energy Future (EF2007) report than EF2007’s baseline Reference Case scenario, which is based on a current economic outlook with a moderated view of energy prices, technological improvements, and climate and energy policies that have been announced and sufficiently detailed for modelling at the time of analysis.

This suggests that trends in Canadian energy demand can differ from business-as-usual expectations. This also illustrates the importance of considering a wide range of scenarios when analyzing future energy trends.

The “Triple E” scenario in EF2007 envisioned a policy and technology push in Canada towards a lower-carbon energy system. It assumed, among other things, slowing growth in international energy demand, more development of alternative energy sources, and growing momentum of the global environmental movement.

Assumptions on policies and actions in Canada included a price on emissions (through carbon pricing or cap-and-trade system), improved energy efficiency standards, research and development into low-emission technology like carbon capture and storage in Alberta and Saskatchewan, and lower-carbon initiatives in the transportation sector.

Source: EF2007 (scenarios), EF2019 (actual), Canada’s Energy Transition
Description: This graph illustrates a comparison between EF2007 Reference Case and Triple E projections with respect to coal, natural gas, oil, and renewables/non-emitting primary energy demand in Canada between 2005 and 2018. The projections are compared to actual energy demand over the same period. To see a fully animated version of this graph, click here.

Between 2005 and 2018, coal and oil demand followed the Triple E scenario pathway more closely, while natural gas demand followed the Reference Case pathway more closely. Renewable and non-emitting energy demand is moderately lower than projected, as declines in nuclear and industrial biomass offset growth in solar, wind, and transportation biofuels.

Canada followed projected demand for coal and oil from EF2007’s Triple E pathway for several reasons including economics, new and improved technology, and changing energy markets. For instance, the actual demand trends for each fuel show a notable decrease during the economic downturn in 2008 and 2009. Additionally, climate policies and regulations, including vehicle emission standards, renewable energy programs, and provincial carbon pricing systems, have influenced trends as well.

Find out more about how Canada’s energy use and emissions are evolving in the CER’s Canada’s Energy Transition: Historical and Future Changes to Energy Systems report.

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