Market Overview

The renewable energy market in Canada is expected to grow at a CAGR of 7.89% from 2021 to 2026, driven by increasing investments in the sector, favorable government policies, and rising awareness of the impact of climate change. According to the National Energy Board (NEB), renewable energy accounts for approximately 17% of Canada’s total primary energy supply, with hydroelectricity being the largest source of renewable energy in the country. However, wind and solar energy are rapidly gaining momentum and are expected to account for a significant share of the renewable energy mix in the coming years.

The renewable energy sector in Canada is gaining momentum as the country looks to reduce its carbon footprint and meet its ambitious clean energy targets. The sector has grown significantly in recent years, with investments in renewable energy surpassing those in traditional energy sources. This has been driven by several factors, including increasing awareness of the impact of climate change, declining costs of renewable technologies, and government support for the sector.

Meaning

Renewable energy is energy that is derived from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable and replenished naturally. Renewable energy technologies include solar photovoltaic (PV), wind turbines, hydroelectricity, biomass, and geothermal.

Executive Summary

The Canada renewable energy market is growing rapidly, driven by increasing investments, favorable government policies, and rising awareness of the impact of climate change. The market is expected to grow at a CAGR of 7.89% from 2021 to 2026, with wind and solar energy expected to account for a significant share of the renewable energy mix. Key market insights include the dominance of hydroelectricity in the renewable energy mix, the declining costs of renewable technologies, and the increasing adoption of smart grid technologies.

Important Note: The companies listed in the image above are for reference only. The final study will cover 18–20 key players in this market, and the list can be adjusted based on our client’s requirements.

Market Key Insights

1. Hydroelectricity Dominates the Renewable Energy Mix

Hydroelectricity is the largest source of renewable energy in Canada, accounting for approximately 60% of the total renewable energy capacity. This is due to the country’s abundant water resources, which make hydropower an attractive source of renewable energy. However, wind and solar energy are rapidly gaining momentum, with wind energy accounting for approximately 7% of the total renewable energy capacity and solar energy accounting for approximately 3%.

2. Declining Costs of Renewable Technologies

The costs of renewable energy technologies, particularly solar PV and wind turbines, have declined significantly in recent years, making them more cost-competitive with traditional energy sources. According to the International Renewable Energy Agency (IRENA), the levelized cost of electricity (LCOE) for onshore wind energy has declined by approximately 40% since 2010, while the LCOE for solar PV has declined by approximately 80%.

3. Increasing Adoption of Smart Grid Technologies

Smart grid technologies are being increasingly adopted in Canada’s renewable energy sector, enabling better integration of renewable energy sources into the grid and improving grid efficiency and reliability. Smart grid technologies include advanced metering infrastructure (AMI), demand response, energy storage, and electric vehicles (EVs).

Market Drivers

1. Favorable Government Policies

The Canadian government has set ambitious clean energy targets and has implemented several policies and incentives to promote the adoption of renewable energy. These policies include the Renewable Energy Deployment Initiative (REDI), the Clean Energy for Rural and Remote Communities program, and the Green Infrastructure Fund.

2. Increasing Awareness of the Impact of Climate Change

As awareness of the impact of climate change grows, there is increasing pressure on governments and businesses to reduce their carbon footprint and transition to cleaner energy sources. This has led to a growing demand for renewable energy, particularly in industries such as transportation, buildings, and manufacturing.

3. Declining Costs of Renewable Technologies

As mentioned earlier, the declining costs of renewable energy technologies have made them more cost-competitive with traditional energy sources, driving their adoption in the market.

Market Restraints

1. High Capital Costs

While the costs of renewable energy technologies have declined in recent years, they still require significant upfront investment, which can be a barrier to entry for some businesses and investors.

2. Grid Integration Challenges

The integration of renewable energy sources into the grid can be challenging due to their intermittency and variability. This can lead to grid stability issues and require the adoption of expensive storage and balancing technologies.

3. Policy Uncertainty

Despite favorable government policies and incentives, there is still some policy uncertainty in the renewable energy market. Changes in government or policy priorities can lead to fluctuations in the market and create uncertainty for investors.

Market Opportunities

1. Offshore Wind Energy

Canada has significant offshore wind energy potential, particularly on the Atlantic coast. The country’s offshore wind resources are estimated to be around 500 GW, which is more than twice the country’s current electricity demand. The development of offshore wind energy could provide significant opportunities for the renewable energy sector.

2. Energy Storage

The increasing adoption of renewable energy sources has created a growing demand for energy storage technologies, which can help balance the intermittency of renewable energy sources and improve grid stability. Energy storage technologies include batteries, pumped hydro storage, and thermal storage.

3. Electric Vehicles

The adoption of electric vehicles (EVs) is expected to increase significantly in the coming years, providing opportunities for the renewable energy sector. EVs require electricity for charging, which could increase demand for renewable energy sources and accelerate the transition to a cleaner energy system.

Market Dynamics

The Canada renewable energy market is highly competitive, with several players operating in the sector. Key players include Brookfield Renewable Partners, Innergex Renewable Energy, Boralex, Northland Power, and Canadian Solar. The market is characterized by increasing investments, favorable government policies, and technological advancements.

Regional Analysis

Canada’s renewable energy market is highly regionalized, with significant variations in renewable energy capacity and adoption across different regions. Ontario is the largest renewable energy market in Canada, accounting for approximately 40% of the total renewable energy capacity. Quebec, British Columbia, and Alberta are also significant renewable energy markets.

Competitive Landscape

Leading Companies in the Canada Renewable Energy Market:

1. Innergex Renewable Energy Inc.
2. Brookfield Renewable Partners L.P.
3. Northland Power Inc.
4. Enbridge Inc.
5. TransAlta Renewables Inc.
6. Boralex Inc.
7. Enerkem Inc.
8. Veresen Inc.
9. Algonquin Power & Utilities Corp.
10. Canadian Solar Inc.

Please note: This is a preliminary list; the final study will feature 18–20 leading companies in this market. The selection of companies in the final report can be customized based on our client’s specific requirements.

Segmentation

The Canada renewable energy market can be segmented based on technology type, end-user, and geography. Technology types include solar PV, wind turbines, hydroelectricity, biomass, and geothermal. End-users include commercial, residential, and industrial users.

Category-wise Insights

1. Solar PV

The adoption of solar PV is expected to increase significantly in the coming years, driven by declining costs and favorable government policies. According to the Canada Energy Regulator, solar PV capacity is expected to increase from approximately 4 GW in 2020 to approximately 18 GW by 2040.

2. Wind Energy

Wind energy is expected to continue to be a significant source of renewable energy in Canada, with capacity expected to increase from approximately 14 GW in 2020 to approximately 35 GW by 2040. This growth is being driven by favorable government policies and declining costs of wind energy technologies.

3. Hydroelectricity

Hydroelectricity is the largest source of renewable energy in Canada, accounting for approximately 60% of the total renewable energy capacity. The adoption of small-scale hydroelectric projects is expected to increase in the coming years, particularly in rural and remote communities.

4. Biomass

The adoption of biomass is expected to increase in the coming years, driven by the growing demand for biofuels and bioenergy. Biomass can be used to produce electricity, heat, and transportation fuels, providing a versatile and flexible source of renewable energy.

5. Geothermal

The adoption of geothermal is expected to increase in the coming years, particularly in regions with significant geothermal resources. Geothermal energy can be used to produce electricity and heat, providing a reliable and constant source of renewable energy.

Key Benefits for Industry Participants and Stakeholders

1. Reduced Carbon Footprint

The adoption of renewable energy sources can help businesses and industries reduce their carbon footprint and meet their sustainability goals.

2. Cost Savings

The declining costs of renewable energy technologies can provide significant cost savings for businesses and industries in the long run, particularly as the costs of traditional energy sources continue to rise.

3. Improved Energy Security

The adoption of renewable energy sources can improve energy security by reducing dependence on imported fossil fuels and providing a reliable and constant source of energy.

SWOT Analysis

1. Strengths

• Abundant renewable energy resources, particularly hydroelectricity
• Favorable government policies and incentives
• Technological advancements in renewable energy technologies

2. Weaknesses

• High capital costs of renewable energy technologies
• Grid integration challenges for intermittent renewable energy sources
• Policy uncertainty in the renewable energy market

3. Opportunities

• Offshore wind energy
• Energy storage technologies
• Electric vehicles

4. Threats

• Competition from traditional energy sources
• Changes in government or policy priorities
• Fluctuations in the market due to economic or political factors

Market Key Trends

1. Increasing Adoption of Solar PV and Wind Energy

Solar PV and wind energy are expected to account for a significant share of the renewable energy mix in Canada in the coming years, driven by declining costs and favorable government policies.

2. Growth in Small-Scale and Community-Based Projects

Small-scale and community-based renewable energy projects are expected to increase in the coming years, particularly in rural and remote communities.

3. Integration of Smart Grid Technologies

The integration of smart grid technologies, such as energy storage, demand response, and electric vehicles, is expected to increase in the coming years, improving grid efficiency and reliability.

Covid-19 Impact

The Covid-19 pandemic has had a mixed impact on the Canada renewable energy market. While the pandemic has led to a slowdown in the construction of new renewable energy projects and disrupted global supply chains, it has also highlighted the importance of clean and reliable energy sources. The pandemic has also led to increased government stimulus and support for the renewable energy sector, providing opportunities for the market to recover and grow in the coming years.

Key Industry Developments

1. Brookfield Renewable Partners Acquires TerraForm Power

In March 2021, Brookfield Renewable Partners completed its acquisition of TerraForm Power, creating one of the largest renewable energy companies in the world.

2. Innergex Renewable Energy Acquires Alterra Power Corp

In 2018, Innergex Renewable Energy completed its acquisition of Alterra Power Corp, expanding its renewable energy portfolio and strengthening its position in the market.

3. Canadian Solar Completes Acquisition of Recurrent Energy

In 2015, Canadian Solar completed its acquisition of Recurrent Energy, expanding its solar energy portfolio and positioning itself as a leading player in the renewable energy market.

Analyst Suggestions

1. Focus on Offshore Wind Energy

Given Canada’s significant offshore wind energy potential, businesses and investors should focus on developing offshore wind energy projects. This could provide significant growth opportunities for the renewable energy sector.

2. Invest in Energy Storage Technologies

Energy storage technologies, such as batteries and pumped hydro storage, are becoming increasingly important for balancing the intermittency of renewable energy sources and improving grid stability. Businesses and investors should consider investing in energy storage technologies to take advantage of this growing market.

3. Embrace Smart Grid Technologies

The adoption of smart grid technologies, such as demand response and electric vehicles, is expected to increase in the coming years, providing opportunities for businesses and investors to capitalize on this growing market.

Future Outlook

The Canada renewable energy market is expected to continue to grow in the coming years, driven by increasing investments, favorable government policies, and rising awareness of the impact of climate change. The adoption of solar PV and wind energy is expected to increase significantly, with offshore wind energy providing significant growth opportunities. Energy storage and smart grid technologies are also expected to become increasingly important for balancing the intermittency of renewable energy sources and improving grid stability.

Conclusion

The Canada renewable energy market is poised for significant growth in the coming years, driven by increasing investments, favorable government policies, and technological advancements. While the market faces some challenges, such as high capital costs and grid integration challenges, there are significant opportunities for businesses and investors to capitalize on the growing demand for clean and reliable energy sources. The adoption of solar PV and wind energy, offshore wind energy, energy storage, and smart grid technologies are expected to drive the growth of the renewable energy sector in Canada and contribute to the country’s transition to a cleaner and more sustainable energy system.