Canada is entering a pivotal phase of power-sector expansion as federal tax credits, the phase-out of coal-fired generation, and accelerating industrial electrification drive substantial capital into wind, solar, and nuclear power
However, according to the latest report from GlobalData, realising the full potential of these clean additions will require overcoming persistent interprovincial transmission bottlenecks and modernising regional grids.
GlobalData’s latest report, “Canada Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035,” found that Canada’s cumulative installed power capacity is projected to expand at a compound annual growth rate (CAGR) of 2.1% between 2025 and 2025.
Over this 10-year period, non-hydro renewable capacity, predominantly wind and solar PV, is expected to increase its share from 20.6% to 31.4% of total capacity, as national electricity demand grows at a CAGR of 1.7% spurred by heating electrification, EV adoption, and large-scale data centre build-out.
Attaurrahman Ojindaram Saibasan, Power analyst at GlobalData, said, “Canada already operates one of the world’s cleanest power systems, anchored by vast provincial hydropower resources and an established nuclear fleet. The next decade will mark a significant evolution: non-hydro renewables will drive the majority of net capacity additions, led by onshore wind and utility-scale solar, while major nuclear life-extension programs and small modular reactor deployments will help maintain baseload stability.”
Despite robust clean energy fundamentals, the market faces structural coordination hurdles. Electricity planning remains constitutionally divided across 10 distinct provincial jurisdictions, meaning provincial networks are often connected far more extensively through high-voltage interconnectors to US regional markets than to neighbouring Canadian provinces.
Saibasan said, “A fragmented grid landscape remains Canada’s principal infrastructure bottleneck. Surplus low-carbon generation in provinces such as Quebec, Manitoba, and British Columbia cannot easily flow to decarbonise fossil-reliant systems in Alberta or Saskatchewan due to limited east-west transmission capacity. Strengthening interprovincial interconnection and accelerating regional transmission approvals are essential to balancing high volumes of intermittent wind and solar without triggering localised grid congestion or curtailment.”
Policy mechanisms are reshaping investment conditions. The federal government’s Clean Economy Investment Tax Credits offer a 15% credit for clean electricity and interprovincial transmission, and up to 30% for clean technologies including wind, solar, storage, and small modular reactors, providing fiscal support. In combination with the federal Clean Electricity Regulations, coal phase-out rules, and industrial output-based carbon pricing, these measures create a financial framework for zero-carbon generation.
Saibasan said, “Canada holds an extensive project pipeline, high-quality resources, and an advantageous net exporter position into cross-border US markets. To double clean electricity supply by 2050 while maintaining ratepayer affordability, policymakers and provincial utilities must focus on coordinated transmission build-out, streamlined project permitting, and long-term equity partnerships with Indigenous communities.”
