Federal regulations threaten Ontario’s ability to meet electricity demand

“Newer forms of supply, such as energy storage, are not ready to operate at the scale that would be needed to compensate; nor is there enough time or resources to build the necessary generation and transmission infrastructure to replace gas generation within an eight-year timeframe.”

A new report from Ontario’s Independent Electricity System Operator (IESO) suggests that electric vehicles and artificial intelligence facilities will drive a massive increase in demand for electricity in Ontario’s not-too-distant future.

The IESO estimates that overall electricity demand will grow by a projected 75 per cent by 2050, which is higher than the 60 per cent increase previously forecasted. The IESO attributes that growth in demand to a number of factors including industrial electric vehicle (EV) production and data centres (increasingly AI-driven). In fact, the IESO reportedly forecasts at least 16 new data centres will be in service by 2035, driving 13 per cent of the new electricity demand.

But where will all that electricity come from?

Under Canada’s current climate and energy policies, it won’t come from fossil fuels, which are to essentially regulated out of use by 2050 per the Trudeau government’s “net zero” greenhouse gas (GHG) plan and proposed Clean Electricity Regulations expected to be enacted by the end of this year. Assuming those frameworks remain in place in coming years, the increased demand for electricity must be met with low- or zero-GHG emitting forms of generation, which include wind power, solar power, hydropower, nuclear power and biomass power generation.

But Ontario already faces a stiff challenge in replacing existing fossil fuel electricity generation with renewables, even before all this new EV/AI-driven demand. In 2021, IESO released a study assessing the impacts of phasing out natural gas generation by 2030. It found that natural gas generation “provides a level of flexibility to respond to changing system needs that would be impossible to replace in the span of just eight years [the province’s current goal].”

The IESO also noted that natural gas power generation in Ontario provides almost three-quarters of the system’s ability to respond quickly to changes in demand. And that the proposed alternate energy technologies are not ready for widespread implementation: “Newer forms of supply, such as energy storage, are not ready to operate at the scale that would be needed to compensate; nor is there enough time or resources to build the necessary generation and transmission infrastructure to replace gas generation within an eight-year timeframe.”

In other words, meeting Ontario’s growing electricity demand by 2030 with low- and no-GHG emitting technologies—without raising electricity prices or destabilizing the grid—will be challenging to say the least.

In light of projected increased electricity demand from AI and EVs (not to mention newer technologies that AI might spawn), the Ontario government should demand relief from the Trudeau government’s forthcoming Clean Electricity Regulations. Without such relief, Ontario might not be able to meet future electricity demand, which would stifle not only the future EV market and the AI revolution, but all other electricity-consuming industries, costing Ontario a great deal of potential economic growth and the prosperity that accompanies it.

Author:

Kenneth P. Green

Senior Fellow, Fraser Institute

Up Next

Conservatives grill CBC CEO for billing taxpayers $6,000 during France vacation

Don't Miss

‘We Had A Bad Experience’: Chinese Officials Losing Sleep Over Thought Of Dealing With Second Trump Term

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

‘The electric story is over’

Business / 2 hours ago

Some Of The Wackiest Things Featured In Rand Paul’s New Report Alleging $1,639,135,969,608 In Gov’t Waste

Alberta / 8 hours ago

A Christmas wish list for health-care reform

Energy

‘The electric story is over’

Published on December 24, 2025

Todayville

From Resource Works

By Stewart Muir

Every episode of Power Struggle offers a different doorway into the global energy system. But every so often I speak with someone who doesn’t merely interpret the data — he dismantles the illusions around it. Energy economist Dr. Anas F. Alhajji is one of those rare voices.

For anyone who follows world oil markets, Anas requires little introduction. He is one of the most widely referenced analysts in global energy economics, managing partner at Energy Outlook Advisors, and a commentator whose views often diverge from the political narratives that dominate Western media. Our conversation, fast-paced and data-driven, reinforced a point I’ve been making for years: many assumptions about the energy transition are overdue for a hard reset.

And if you think the transition is unfolding as advertised, Anas has a simple message: look again.

Peak oil demand — or peak illusion?

We began with the recurring claim, made most notably by the International Energy Agency, that global oil demand is nearing a terminal peak. Anas has long challenged this analysis, but his breakdown was especially stark.

“In May 2025, they said they are revising up global oil demand… They’ve been wrong for 18 straight years. By how much? Two or three years. The total is about 350 million barrels.”

He added an even sharper example.

“In August, they revised up Mexico’s oil demand by a hundred thousand barrels a day — since 2020. With all of this, who is going to believe the IEA?”

If we are going to debate “peak oil demand,” Anas argued, we must start with accurate numbers. And reality, as he laid out, tells a very different story.

Oil demand is higher — not lower

The most striking fact he brought to the table was where global demand sits today.

“Current world demand for oil is 107 million barrels a day.”

That figure sits eight million barrels above 2019 levels, despite rapid growth in electric vehicle sales. And here is where the assumptions collide with the data.

“Right now we have about 55 million EVs… 35 million are in China. The replacement in terms of oil is only 1.3 million barrels a day. That’s it.”

EVs are increasing, yes — but the global vehicle fleet is expanding even faster, and so is mobility demand. A century’s worth of built energy systems does not pivot overnight.

Hybrids now dominate

This brought Anas to the point that may surprise the most people.

“The trend right now is very clear. We are going hybrid. Hybrid. The electric story is over.”

He emphasized that this is not ideological — it is practical. Hybrids outperform EVs on cost, convenience and grid impacts, and consumers are voting with their wallets.

“Hybrid sales have been going through the roof. And this is going to continue… The media reports EV sales all the time. But what matters is the number of EVs on the road.”

This distinction matters. Monthly sales data can create a false sense of momentum. What counts for emissions, infrastructure planning and oil displacement is the stock of vehicles actually in use.

Three ‘scams’ in EV sales reporting

Anas went further, arguing that even sales data does not always reflect real-world adoption. He described what he called three “scams” that inflate EV sales figures globally. He shared one example on air:

“There are many tens of thousands of them in parking lots that are not being sold… A manufacturer calls an official, says: I have 2,000 cars. I will sell them to you. You issue the license plates, you issue the insurance, you get all the subsidies, we split it. But the cars are still in the parking lot.”

On paper, these are “sales.” In reality, they are inventory.

The broader point is that EV market statistics need scrutiny — and policymakers who rely on headline numbers may be basing major decisions on flawed data.

Why Canada still needs another pipeline

We then turned to Canada’s current debates about pipelines and whether the country still needs more tidewater access. Anas answered without hesitation.

“I can tell you without any reservation, we do need another pipeline, another Canadian pipeline to tidewater.”

His rationale was blunt.

“Energy demand globally is increasing at a very high rate in a way that we have never seen before.”

For Canada, this is about competitiveness. Without access to global markets, Canadian oil is priced at a discount — a problem solved only by pipelines reaching the coast.

On LNG: “Canada should go at full speed”

Anas was even more emphatic when discussing natural gas.

“That’s where Canada basically should go at full speed.”

He criticized the idea of a long-term LNG surplus.

“All those ideas about a surplus in LNG… it is nonsense.”

Asian LNG demand is projected to grow sharply, and Canada’s low-emissions LNG — powered by hydro — gives the country a unique competitive advantage.

Why voices like Anas matter

What I value most about conversations like this is the grounding they give us. In energy, narratives and evidence are drifting apart. You may not agree with every assertion, but you can’t dismiss the data. Whether discussing EVs, oil demand, LNG or Canada’s infrastructure, Anas reminds us that aspirations only matter when they intersect with reality.

This episode of Power Struggle is exactly the kind of dialogue we need: sober, data-based, and challenging enough to re-examine assumptions.

You can listen to the full conversation wherever you get your podcasts. If it unsettles a few comfortable stories — that’s the point.

Watch the video on Power Struggle

Power Struggle on social media:

Resource Works News

Alberta

What are the odds of a pipeline through the American Pacific Northwest?

Published on December 23, 2025

Todayville

From Resource Works

By Geoff Russ

Can we please just get on with building one through British Columbia instead?

Alberta Premier Danielle Smith is signalling she will look south if Canada cannot move quickly on a new pipeline, saying she is open to shipping oil to the Pacific via the U.S. Pacific Northwest. In a year-end interview, Smith said her “first preference” is still a new West Coast pipeline through northern British Columbia, but she is willing to look across the border if progress stalls.

“Anytime you can get to the West Coast it opens up markets to get to Asia,” she said. Smith also said her focus is building along “existing rights of way,” pointing to the shelved Northern Gateway corridor, and she said she would like a proposal submitted by May 2026.

Deadlines and strings attached

The timing matters because Ottawa and Edmonton have already signed a memorandum of understanding that backs a privately financed bitumen pipeline to a British Columbia port and sends it to the new Major Projects Office. The agreement envisages at least one million barrels a day and sets out a plan for Alberta to file an application by July 1, 2026, while governments aim to finish approvals within two years.

The bargain comes with strings. The MOU links the pipeline to the Pathways carbon capture network, and commits Alberta to strengthen its TIER system so the effective carbon credit price rises to at least 130 dollars a tonne, with details to be settled by April 1, 2026.

Shifting logistics

If Smith is floating an American outlet, it is partly because Pacific Northwest ports are already drawing Canadian exporters. Nutrien’s plan for a $1-billion terminal at Washington State’s Port of Longview highlighted how trade logistics can shift when proponents find receptive permitting lanes.

But the political terrain in Washington and Oregon is unforgiving for fossil fuel projects, even for natural gas. In 2023, federal regulators approved TC Energy’s GTN Xpress expansion over protests from environmental groups and senior officials in West Coast states, with opponents warning about safety and wildfire risk. The project would add about 150 million cubic feet per day of capacity.

A record of resistance

That decision sits inside a longer record of resistance. The anti-development activist website “DeSmog” eagerly estimated that more than 70 percent of proposed coal, oil, and gas projects in the Pacific Northwest since 2012 were defeated, often after sustained local organizing and legal challenges.

Even when a project clears regulators, economics can still kill it. Gas Outlook reported that GTN later said the expansion was “financially not viable” unless it could obtain rolled-in rates to spread costs onto other utilities, a request regulators rejected when they approved construction.

Policy direction is tightening too. Washington’s climate framework targets cutting climate pollution 95 percent by 2050, alongside “clean” transport, buildings, and power measures that push electrification. Recent state actions described by MRSC summaries and NRDC notes reinforce that direction, including moves to help utilities plan a transition away from gas.

Oregon is moving in the same direction. Gov. Tina Kotek issued an executive order directing agencies to move faster on clean energy permitting and grid connections, tied to targets of cutting emissions 50 percent by 2035 and 90 percent by 2050, the Capital Chronicle reported.

For Smith, the U.S. corridor talk may be leverage, but it also underscores a risk, the alternative could be tougher than the Canadian fight she is already waging. The surest way to snuff out speculation is to make it unnecessary by advancing a Canadian project now that the political deal is signed. As Resource Works argued after the MOU, the remaining uncertainty sits with private industry and whether it will finally build, rather than keep testing hypothetical routes.

Resource Works News