The global energy system is undergoing a transformation unlike any since the industrial revolution. Solar and wind power, once marginal curiosities, have become the cheapest sources of new electricity in most of the world. This transition offers hope for addressing climate change, but raises complex questions about reliability, land use, supply chains, and what happens to communities built around fossil fuels. Canada, with its vast geography, diverse energy mix, and significant fossil fuel sector, faces particular challenges and opportunities as the world shifts toward renewable energy.
The Renewable Revolution
Cost Declines
The economics of renewable energy have transformed dramatically. Solar photovoltaic costs have fallen roughly 90% since 2010. Wind power costs have dropped similarly. These technologies are now cheaper than building new coal or gas plants in most locations, and increasingly competitive with running existing fossil fuel plants. Battery storage costs are falling rapidly, addressing the intermittency that has historically limited renewable penetration.
These cost declines result from learning curves, manufacturing scale, policy support, and technological improvement. They have exceeded most projections. What seemed impossible a decade ago—grids dominated by variable renewable energy—now appears not only feasible but economically attractive. The pace of change continues to accelerate.
Deployment Growth
Global solar and wind installation grows by double digits annually. China leads in renewable deployment while remaining the world's largest coal user—an illustration of the scale of transformation required. Europe has built extensive offshore wind capacity. The United States has seen dramatic growth despite policy inconsistency. Even fossil fuel producers like Saudi Arabia are investing in solar for domestic electricity to preserve oil for export.
Canada's Position
Canada's electricity grid is already relatively clean, with hydroelectric power providing the majority of generation in several provinces. This is a significant advantage. But it also means the easy emissions reductions have already been captured. Further decarbonization requires tackling harder sectors—transportation, buildings, industry—and the provinces that still rely on fossil fuels for electricity.
Canadian renewable resources are abundant. Prairie wind, coastal tides, northern solar during long summer days, and further hydroelectric potential all exist. But development faces challenges including long distances to population centres, cold climate impacts on equipment, and complex regulatory landscapes across provinces with different energy policies.
Technical Challenges
Intermittency and Grid Integration
The sun doesn't always shine; the wind doesn't always blow. Integrating high levels of variable renewable energy requires rethinking how grids operate. Solutions include geographic diversification (the wind is usually blowing somewhere), improved forecasting, demand flexibility (shifting electricity use to times of high renewable output), storage, and backup generation. No single solution suffices; the challenge is integrating multiple approaches.
Storage Technologies
Battery storage, particularly lithium-ion technology, has improved dramatically and is increasingly deployed alongside solar and wind. But batteries are expensive for long-duration storage—covering multiple days of low renewable output, for example. Other storage technologies—pumped hydro, compressed air, hydrogen, flow batteries—may address longer durations. Canada's existing hydroelectric reservoirs could potentially provide massive storage capacity if transmission infrastructure connected them to renewable generation in other regions.
Transmission and Distribution
Renewable resources are often distant from where electricity is consumed. Building transmission lines to connect windy prairies to eastern population centres, or to enable interprovincial electricity trade, requires major infrastructure investment and faces regulatory, environmental, and social barriers. Local distribution systems also need upgrading to handle solar installations on homes and buildings, electric vehicle charging, and bidirectional power flows.
What Comes Next
Emerging Technologies
The technologies driving the current renewable revolution may not be the final word. Offshore wind is expanding from fixed to floating platforms, opening vast new areas. Next-generation solar technologies promise higher efficiencies. Small modular nuclear reactors might provide firm low-carbon power, though cost and deployment timelines remain uncertain. Green hydrogen produced from renewable electricity could decarbonize sectors like steel and shipping. Geothermal, tidal, and wave power have potential in specific locations.
Beyond Electricity
Electricity currently represents only a fraction of energy use. Transportation, heating, and industrial processes still depend heavily on fossil fuels. Electrification—shifting these uses to electricity that can be generated renewably—is crucial. Electric vehicles are growing rapidly. Heat pumps can replace fossil fuel heating. Some industrial processes can electrify. But some applications may require alternative fuels like hydrogen or biofuels rather than direct electrification.
System Integration
The future energy system will be more complex than today's. It will integrate electricity, heat, and transport. It will require sophisticated management of supply and demand. It will involve millions of distributed energy resources—rooftop solar, batteries, electric vehicles—alongside large central plants. This integration creates opportunities for efficiency and resilience but also challenges for planning, regulation, and grid operation.
Social and Economic Dimensions
Jobs and Economic Transition
Energy transition creates jobs—in manufacturing, installation, maintenance—but also displaces jobs in fossil fuel industries. The location and skills of new jobs don't automatically match those of lost jobs. Workers in Alberta oil sands or Saskatchewan coal cannot simply become wind turbine technicians in Ontario. Just transition requires proactive planning, retraining, economic diversification, and support for affected communities and workers.
Land and Community Impacts
Renewable energy has lower lifecycle emissions than fossil fuels but is not impact-free. Solar and wind farms use land—more land per unit of energy than fossil fuel plants, though less than their full lifecycle footprint including extraction. Wind turbines affect birds and create noise. Hydroelectric dams flood valleys and affect fish. Mining for battery materials has environmental and human rights dimensions. Siting decisions create conflicts with agriculture, conservation, and community preferences.
Energy Sovereignty and Security
Renewable energy is inherently local—sunlight and wind cannot be embargoed or interrupted by foreign suppliers. This offers energy security advantages over imported fossil fuels. Indigenous communities see potential in developing renewable projects on their territories, generating revenue and energy independence. But supply chains for renewable equipment currently depend heavily on China and other countries, creating different vulnerabilities.
Affordability and Equity
Who benefits from and who pays for energy transition? Those who can afford solar panels, electric vehicles, and home batteries may reduce their energy costs while grid costs are spread across remaining customers. Low-income households may struggle to access new technologies. Rural and remote communities face different opportunities and challenges than urban areas. Indigenous communities have often borne environmental costs of energy development without sharing benefits. Just transition must attend to these equity dimensions.
Policy and Governance
Provincial Variation
Energy policy in Canada is largely provincial. British Columbia has clean electricity and an electric vehicle mandate. Alberta has expanded wind capacity while maintaining oil and gas production. Ontario's complex history includes both renewable expansion and policy reversals. Quebec's hydroelectric wealth creates different incentives than provinces dependent on fossil fuels. This variation creates both innovation and fragmentation.
Federal Role
The federal government influences energy transition through carbon pricing, regulations, incentives, and its own operations. The clean electricity standard aims to achieve a net-zero grid by 2035—ambitious given current infrastructure and provincial jurisdiction. Federal investment in transmission, research, and industry support can accelerate transition. But federal power over provincial energy decisions is limited.
International Context
Canada's transition occurs within global context. Climate commitments require reducing emissions. Trade policy affects clean technology markets. International leadership—or its absence—shapes Canada's position. The transition of major trading partners, particularly the United States, affects Canadian competitiveness and choices.
Questions for Further Discussion
- How quickly should Canada transition its electricity grid to renewable sources, and what tradeoffs are acceptable in pursuing that goal?
- What policies best support workers and communities displaced by fossil fuel decline while building clean energy industries?
- How should land use conflicts between renewable energy development, agriculture, conservation, and community preferences be resolved?
- What role should nuclear power, hydrogen, and other emerging technologies play alongside solar and wind?
- How can energy transition advance rather than undermine equity for low-income Canadians, rural communities, and Indigenous peoples?