Canada announces C$500M for clean energy projects, calls for private investments

Canada refinanced an over C$4 billion program dedicated to funding new renewable energy projects as the country aims to increasingly attract global investments.

Jonathan Wilkinson, Canadian Minister of Energy and Natural Resources, announced an investment of C$500 million ($363.5 million) in the Smart Renewables and Electrification Pathways program Utility Support Stream on Oct. 10. After this latest funding round, the program’s size is about C$4.5 billion so far.

“This next step will allow us to support even more projects as we work with provinces, territories, Indigenous governments and non-governmental partners as we work toward our common goal of an energy-efficient and money-saving clean grid,” Wilkinson said.

This round of funding will be awarded to projects that upgrade existing assets, increase grid reliability, add new renewable energy resources and help accommodate growing power demand. More intake processes for other types of projects will be launched over the next few months, the statement reads.

“Since 2021, SREPs has approved funding for 72 projects, enabling the deployment of approximately 2,700 megawatts of new renewable energy capacity, which will produce enough electricity to power 700,000 homes annually and displace over 3.1 megatonnes of CO2e per year,” the statement reads.

One significant driver of increased power demand is new data centers. Canadian utilities are having to factor data center electricity usage into their outlooks, including Hydro Quebec projecting an increase of 4.1 TWh of data center demand from 2023 to 2032. Ontario and Alberta electric system operators are considering outlooks with higher electricity demand driven largely by data centers.

The government estimates that reaching net-zero emissions in Canada would require between C$125 billion-C$140 billion of investment each year.

This latest funding announcement follows a new climate investment taxonomy framework set by the Government of Canada on Oct. 9. The voluntary Made-In-Canada sustainable investment guidelines aim to bolster private investments into decarbonizing energy.

“Beyond incentives to attract investment to Canada, investors need robust and transparent guidelines to credibly classify their investments into the clean economy on the path to net-zero,” the government said.

Alongside the guidelines, the country will also mandate “climate-related financial disclosures for large, federally incorporated private companies.” Mandatory disclosures would attract more private capital and allow for better competition, the government said.

These guidelines set the stage for a “major acceleration of Canada’s clean energy transition,” said Jonathan Arnold, research lead at the Canadian Climate Institute, said in a response statement.

“Done well, Canada’s climate investment taxonomy and updated risk disclosure requirements will help attract global capital to compete with our neighbors to the south,” Arnold said.