Canada is entering a major phase of power-sector expansion as federal tax credits, coal-fired generation phase-outs and industrial electrification drive investment in wind, solar and nuclear energy.

However, interprovincial transmission bottlenecks and ageing regional grids could hinder the integration of new clean power, according to GlobalData.

The company’s latest report, Canada Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035, projects that Canada’s installed power capacity will grow at a compound annual growth rate (CAGR) of 2.1 per cent between 2025 and 2035.

Non-hydro renewable capacity, primarily wind and solar photovoltaic (PV), is forecast to increase its share of total installed capacity from 20.6 per cent to 31.4 per cent.

Electricity demand is expected to rise at a CAGR of 1.7 per cent, driven by electric heating, electric vehicle adoption and expanding data-centre infrastructure.

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 strong clean-energy fundamentals, Canada’s electricity system faces coordination challenges because planning remains divided among 10 provincial jurisdictions. Transmission links often connect provincial networks more extensively to US markets than to neighbouring provinces.

Saibasan added: “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.”

Federal Clean Economy Investment Tax Credits offer a 15 per cent credit for clean electricity and interprovincial transmission, and up to 30 per cent for eligible clean technologies, including wind, solar, storage and small modular reactors.

Combined with clean electricity regulations, coal phase-out policies and industrial carbon pricing, these measures are supporting investment in zero-carbon generation.

Saibasan concluded: “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.” -OGN/TradeArabia News Service