Q3 Newsletter September 30, 2025
The appetite for electricity
The city of Ottawa can lay claim to a global culinary first. According to the Historical Society of Ottawa, on August 29,1892, the Windsor House Hotel, announced on its evening menu that,
“(e)very item … has been cooked by the electric heating appliance invented and patented by Mr. T. Ahearn of Ahearn & Soper of this city and is the first instance in the history of the world of an entire meal being cooked by electricity.”
We learned this by asking ChatGBT to tell us about the history of the electrification of the city of Ottawa.
The electricity used to cook that meal was generated by a run-of-river hydropower facility on the Chaudière Falls between the cities of Ottawa and Gatineau. The facility, now owned by Portage Power | Énergie, is still there and generating electricity.
The dinner represented one of the early steps of the electrification of Canada. The electricity industry now faces the challenge of further electrification of a much larger and more complex country. Among the drivers of the challenge are Artificial Intelligence models, like ChatGPT, and the data centres on which they rely, the so-called “hyperscalers”.
The electrification of industry and personal transportation, ongoing at the same time, follow the same path as the Windsor House kitchen. It represents a new energy source to improve an existing function. While the data centre, especially the AI data centre, uses electricity to support a range of new functions and services.
In-house data storage and manipulation have a long history relative to the life of the computing industry. But the use of large-scale, off-site, third-party facilities is a more recent phenomenon. The Canadian Energy Regulator estimates that there are 239 data centres operating across Canada. It stands to reason that as more uses are found for computing and more people and organizations adopt them, a technology that fundamentally translates electrical impulses into highly sophisticated outputs will require more and more energy.
Those requirements are expected to increase energy demand by orders of magnitude. Given the pace at which new electricity generation can be approved and constructed, there is no guarantee that demand and supply will advance at the same pace. The Climate Action Institute of the Royal Bank of Canada cites estimates that electricity production in Canada will be 750 GWh in ten years, while potential demand could be 875 GWh over the same period. If all of the data centre projects currently under consideration move forward, they would constitute 14% of Canadian electricity demand by 2030.
Canada is an attractive place to construct data centres. We have clean electricity, attractive prices, and a cool climate. A critical use of electricity in data centres is for cooling the physical installation. It is filled with routers, switches, firewalls, storage systems, servers, and application delivery controllers. The electricity requirements of a single AI data centre are equivalent to those of 50,000 Canadian homes, according to the Canadian Energy Regulator. Data centres have been described as the backbone of the online economy.
In addition to the expansion of computing power, the electricity industry will be challenged to meet the demands of an economy that is expected to put greater emphasis on electricity as an industrial energy source and rely increasingly on electric vehicles as a preferred personal transportation option .
The supply side is also developing. Small modular reactors, wind, solar, improved storage, and carbon capture use and storage for natural gas generation have the potential to improve the commercial and environmental appeal of new electricity sources. An expanded – and perhaps more integrated – Canadian grid could emerge to support the optimum domestic matching of supply and demand of Canadian electricity.
These are exciting times for Canadian electricity. But that is not to diminish the significance of the Windsor House kitchen on that summer evening in 1892.
A global first is a global first, after all.
IN THE NEWS
July
Prime Minister Carney Cites Two Energy Developments as Possible
"Projects in the National Interest"
Prime Minister Carney, in an interview with the press, mentioned two proposals that could be considered major projects in the national interest. One is, a yet to be proposed, oil pipeline to the BC coast. He said any proposal would have to be put forward by the private sector.
The other project, which has been proposed by Pathways Alliance, is an oil sands carbon capture gathering system. The estimated investment is $16.5 billion. Reuters
Despite Cost Increases Enbridge Expects Investment in Woodfibre LNG Project
to Meet its Rate of Return Target
Enbridge, a 30 percent owner of the Woodfibre LNG Project under construction near Squamish, BC, announced that its projected investment in the facility has increased to $4.0 billion from $2.1 billion. Enbridge entered into an agreement in 2022 with 70 percent owner Pacific Energy Corporation Ltd. to develop the project. Enbridge cited permitting delays and the necessity of accommodating an additional 900 workers as contributing factors to the increase.
The project, which is under construction on the site of a former pulp mill, will be capable of exporting 2.1 millions tonnes of LNG per year when it is scheduled to begin operations in 2027. BIV Business Intelligence for BC
Alberta, Saskatchewan, and Ontario Agree to Enable Easier Interprovincial Commerce and Responsible Energy Development
The province of Ontario has concluded agreements with Alberta as well as Saskatchewan to open interprovincial commerce and support a more integrated Canadian economy. The measures are designed to improve the flow of goods and services across provincial boundaries. They also seek to recognize certification of tradespeople and other professionals from other provinces. Financial Post
August
Canada Signs Agreement with Germany on Financing Critical Minerals Projects
The federal government has signed an agreement with Germany to encourage joint public financing of resource projects. The agreement emphasizes the possibility of exports of critical minerals to Germany. Nickel and cobalt, in particular, are vital to energy and military development. Such projects would allow Germany to shift its purchases of the resources to an allied country. At the same time, the two governments indicated a desire to work more closely on liquefied natural gas and hydrogen fuel development. MSN/The Canadian Press
The Prime Minister's Office has announced that Dawn Farrell will be the First Head of the Major Projects Office.
The office’s mandate is to “serve as a single point of contact” to get projects built faster, according to the release. “It will do so in two principal ways. First, by streamlining and accelerating regulatory approval processes. Second, by helping to structure and co-ordinate financing of these projects as needed,” the prime minister’s office said.
Ms. Farrell is an experienced oil and gas industry executive. After a 35-yr career at TransAlta Ltd., she took on the role of leading the government-owned TransMountain Oil Pipeline project. Globe and Mail
Cenovus Agrees to Acquire MEG for $7.9 billion
Cenovus Energy Inc. agreed to acquire MEG Energy Corp. in a cash and stock transaction valued at about $7.9 billion, inclusive of assumed debt. Both companies have oil sands operations in northeast Alberta. Cenovus’s offer was preferred to an offer from Strathcona Resources Ltd.
MSN.COM
September
European LNG Buyers Considering Securing Canadian West Coast Exports through Trading Swaps
Natural Resources Minister Tim Hodgson, speaking to reporters after two days of meetings in Germany, reported that there is interest in purchasing Canadian LNG exported from facilities on the west coast. In order to overcome the transportation challenge of moving product from the Pacific to Europe, buyers would take advantage of the highly liquid international LNG market. Europeans are considering signing offtake agreements, committing them to specific volumes over a specified time. The buyers would use trading desks to swap the physical volumes for those underway on vessels with easy access to Europe. EnergyNews Media
LNG and Nuclear Among the First Five Nation-building Projects
The Prime Minister announced on 10 September the first five nation-building projects the government has identified. One involves a port expansion, two are mining projects, and two are energy projects. They are the expansion of LNG export capacity and the production of small modular nuclear reactors. The Prime Minister said that the government will be asking, “How can we build? How can we do it bigger? How can we do it faster?” CBC
Hitachi Energy Plans to Triple Production at Its Varennes HVDC Transformer Facility
In response to increasing demand Hitachi Energy in Canada has announced a $270 million investment in its production facility in Varennes, Quebec, near Montreal. The plant is an important component of the company’s power grid equipment unit. It produces high-voltage, direct-current (HVDC) transformers that support electricity grid operation as well as industrial sites.
The expansion will triple the facility’s output and more than double employment to over 900 people. The federal and Quebec governments are contributing financing to the expansion. The federal government views the production of this equipment as a vital element of its efforts to advance energy sovereignty and support the development of key technologies for Canada’s industrial base. MSN