Solar is overtaking wind as the largest single source of new generating capacity in Canada in 2024, according to an analysis of S&P Global Market Intelligence data, but new gas-fired resources, both new facilities and repowered coal plants, are expected to come into service as well.
Canada is projected to add 11,104 MW and retire 1,892 MW of capacity on its grid in 2024, for a net gain of 9,212 MW.
Unlike 2023, when wind was the main driver of planned additions across all fuel types, solar is projected to add the most capacity in 2024.
"We saw a shift between solar and wind additions because wind used to grow much faster than solar, and solar started to catch up and is expected to outpace wind," Hilary Bao, senior research analyst at S&P Global Commodity Insights, said in an interview.
One potential reason for this shift toward solar is that the captured price per megawatt-hour is more for solar than wind, Bao said.
Two large plants account for Canada's capacity retirements in 2024.
Two of the six units at Ontario Power Generation Inc.'s Pickering nuclear plant, totaling 1,032 MW, are scheduled to be retired at the end of 2024. That is part of a long-term refurbishment effort during which the other four units at Pickering will be upgraded to operate for an additional 30 years.
Coal retirements this year will total 860 MW, reflecting Capital Power Corp's conversion of its 860-MW Genesee coal plant to a combined-cycle gas plant. The repowered units will add 1,360 MW of gas capacity, initially running in simple-cycle mode prior to completion.
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The renewable energy additions will help Canada work toward its goal of net-zero emissions by 2050. The federal government is also finalizing clean energy regulations that aim to decarbonize its electric grids by 2035.
Along with these goals, Bao said federal investment tax credits are helping drive the adoption of renewables.
Vittoria Bellissimo, president and CEO of the Canadian Renewable Energy Association, said renewables adoption could be accelerated further if investors had greater certainty that tax policies and other incentives would not change depending on the outcome of elections.
"We need to be open for business for green energy, no matter who is in power federally and within the various provinces of Canada," Bellissimo said in an interview. "Investment in solar is outpacing investment in upstream oil. So we know that energy demand will grow with electrification ... we all agree that electricity demand will increase. So the market for the most affordable type of new generation is going to be there. It's just a question of whether or not we can incent that appropriately."
Most new capacity coming in Alberta
Most of Canada's 2024 capacity additions are expected in Alberta, where the province's electric system is managed by an independent system operator, the Alberta Electric System Operator. The grid in Ontario, Canada's most populous province, is also managed by an independent system operator, the Independent Electricity System Operator.
Energy think tank the Pembina Institute said in July 2023 that Alberta was on track to be a leader in wind and solar, a trend that could continue over the next decade.
Several factors have been driving the province's renewables additions, among them available land and good wind and solar resources. Along with federal incentives, Alberta has a carbon credit, which Bao said is unique to the province. The province's coal phaseout is another driver.
"Because Alberta is phasing out its coal power plant[s], they would face a supply shortage," Bao said. "That's why Alberta is ambitious to phase in more renewables."
Bao added that the coal retirements pushed energy commodity prices higher, which potentially attracted new investments in renewables.
Alberta in February lifted its moratorium, imposed in August 2023, on approving renewable energy projects but added new restrictions on developments on class 1 and 2 agricultural land as well as a ban on wind projects within 35 kilometers of protected areas and "pristine viewscapes."
The Canadian Renewable Energy Association said the pristine viewscapes limitation would keep portions of the province off-limits to renewables developers. While thankful that the moratorium was lifted, "there remains significant uncertainty and risk for investors wishing to participate in Canada's hottest market for renewables," Bellissimo said in a Feb. 28 statement.
Renewables projects under development prior to the moratorium were able to continue. The Buffalo Plains Wind Farm in Alberta was under construction as of November 2023 and expected to come online in December 2024. Once completed, it will be the largest onshore wind project in Canada at 495 MW. Original developer ABO Wind AG sold the project to Copenhagen Infrastructure Partners P/S in 2022, and in 2023 Amazon.com Inc. signed a power purchase agreement for 415 MW of output from the wind farm.
Northland Power Inc.'s 220-MW Jurassic Solar Project in Alberta, scheduled for completion in 2024, has an 80-MW battery storage component.
Resources to back up renewables
Alberta's grid operator warned in September 2023 that the country's 2035 grid decarbonization goal could lead to blackouts or brownouts. Saskatchewan and Ontario have also raised reliability concerns.
"They want to phase in more controllable or dispatchable resources and that's why Alberta is thinking of adjusting its market design," Bao said.
At the direction of the provincial government, the Alberta Electric System Operator in March launched a stakeholder engagement process on a restructured energy market recommendation it had submitted earlier to the Ministry of Affordability and Utilities.
Alberta and Saskatchewan are adding gas capacity to head off potential reliability issues. The Cascade Combined Cycle Project in Alberta — owned by a consortium including an Ontario pension fund, infrastructure investors and Indigenous groups representing six Alberta First Nations — is expected to be in service this year and will add 900 MW. Saskatchewan Power Corp.'s 350-MW Moose Jaw Combined Cycle Power Station (Great Plains) is scheduled to come online this summer, according to S&P Global Market Intelligence data.
Another large project expected to come into service in Alberta this year is Suncor Energy Inc.'s 806-MW Inglis Island Plant 27 (Suncor Oil Sands Base Cogen Plant). This gas-fired facility in the northern part of the province will replace existing petroleum coke-fired boilers at an oil sands facility, an investment Suncor said will reduce greenhouse gas emissions and water use.
Among projects elsewhere in Canada, the Apuiat Wind Farm in Quebec is expected to produce 200 MW when it begins operation in the second half. The project is a partnership between Boralex Inc. and the Innu community and secured C$608 million in financing in September 2023. Hydro-Québec will purchase the wind farm's output under a 30-year contract.