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Canada’s energy sector to see increasing investments as 2050 nears: Analysts

Canada’s energy sector will be the recipient of a wave of public and private investment dollars in the coming decade, experts say, as the push to reach net-zero greenhouse gas emissions by 2050 gains momentum.

On Oct. 25, the federal government through the Canada Infrastructure Bank announced an investment of almost $1 billion into Ontario Power Generation for the construction of the country’s first small modular nuclear reactor, which is being developed near the Darlington Nuclear Generating Station.

It was the kind of blockbuster announcement we can expect to see more of as the coming energy transition gathers steam, said Bruce Lourie, president of the Ivey Foundation, a private charitable foundation dedicated to supporting Canada’s transition to a net-zero future while ensuring the country’s long-term economic competitiveness.

“And every time there is an investment, every time there’s a new plant, there’s income from the investment, there’s jobs from the investment, there’s new economic activity, there’s trade,” Lourie said.

“We hear a lot about how it’s going to cost a lot to transition the energy system. Well, we’re going to benefit a lot too.”

According to a report from RBC Capital, a record $920 billion was invested specifically in the global energy transition space in 2021, and tens of trillions more will be invested in the years to come as investors focus on decarbonization and growth.

Investment dollars will be needed for everything from carbon capture and storage and other projects aimed at helping to “green” traditional high-emitting sectors like oil and gas extraction, as well as for renewables, nuclear, electrification, large-scale building retrofits and more.

The projects that ultimately win out, from an investor perspective, will be the ones that are reliable, affordable and capable of achieving social licence, said Jacquie Hoornweg, executive director of Ontario Tech University’s Brilliant Energy Institute.

“If we’re committed that we’re going to do this (get to net-zero), we really have no choice but to invest in energy,” Hoornweg said.

Over the past decade, Canada’s energy sector has struggled with a lack of investment due to a variety of factors including commodity price woes, pipeline access issues, and regulatory and environment concerns. As a result, major new capital projects in the sector have been few and far between.

But in recent months, the Canadian oil and gas sector has rolled out a flurry of announcements of proposed projects — from hydrogen plants to renewable diesel facilities to carbon capture and storage — aimed at lowering the industry’s emissions profile.