Utilities throw down on a bigger, cleaner, smarter grid

British Columbia has just hit the accelerator on the clean energy transition, announcing a $36-billion investment in electricity grid expansion and upgrades over the next decade. BC Hydro’s updated capital plan, announced last Tuesday, marks a 50 per cent increase over the utility’s previous plan. The bulk of these investments will go towards new customer connections and upgrading existing assets, including substations, transmission lines and hydro dams to produce power more efficiently.

The driving force of this transformative investment? A rapidly growing demand for clean power across homes, businesses and industries in British Columbia, with a projected 15 per cent rise in electricity demand by 2030. Clean electricity is increasingly understood as critical to meeting Canada’s climate targets — Canadian Climate Institute modelling has shown that every conceivable pathway to decarbonization will require substantial electrification in virtually every sector of the Canadian economy.

As the population grows, industry takes steps to reduce its carbon pollution, and customers switch over to clean technology, BC Hydro needs to upgrade the electrical network to keep pace. And with the province already seeking to improve housing affordability, including through densification, and with households facing increased costs due to worsening damage from climate change, grid upgrades are crucial. Why? Because households need affordable, reliable power and access to clean technologies like electric vehicles and heat pumps that can provide financial savings and other benefits.

This big switch from powering our homes, vehicles and workplaces with fossil fuels to powering them with clean electricity is well underway everywhere, but particularly in British Columbia. Over the past six years, the number of electric vehicles on B.C. roads skyrocketed twenty-fold. One in five new light-duty passenger vehicles sold in B.C. was electric in 2023 — the highest percentage for any province or territory. Over 200,000 B.C. homes now have heat pumps. With households increasingly choosing to switch from fossil fuels to B.C.’s renowned clean electricity (98 per cent renewable), BC Hydro has seen the writing on the wall: the grid must keep up.

This investment also aims to catalyze industrial emission reductions and attract industrial investment. The demand for transmission along the North Coastline, from Prince George to Terrace, could easily double this decade, and this demand comes from a variety of sectors, including mining. Mining companies, like everyone else, are increasingly focused on reducing their carbon pollution and seek to invest in locations with access to clean power. This pressure is elevated for firms supplying materials for clean technologies like electric vehicle batteries and solar panels.

B.C.'s grid-strengthening strategy mirrors initiatives in other provinces like Quebec. Hydro-Québec took early leadership late last year, announcing $155 billion to $185 billion in capital and operating investments in its 2035 Action Plan. Drivers are similar: supporting decarbonization and facilitating economic growth. By 2050, Hydro-Québec estimates the province will need double the amount of electricity (additional demand by 2035 is roughly split between homes and transport, industry and supporting economic growth).

The two utilities’ plans aren’t about building out indiscriminately; they fund both new construction and getting more from existing assets, including upgrading dams and transmission lines. Hydro-Québec’s plan, for example, prioritizes affordability by including energy efficiency targets that will double current customer savings. This should free up over 3,500 megawatts, the equivalent of multiple new hydro dams.

Even with this level of investment, provinces need to be facilitating conversations about priorities and defining the best use of clean electricity resources. Quebec has also moved away from a first-come, first-served approach to reviewing significant requests for new industrial power as demand surges.

B.C. has signalled its own move toward strategic prioritization, through the province’s ongoing development of a climate-aligned energy strategy. In 2023, the province began by introducing a moratorium on new connections for virtual currency mining facilities. Cryptocurrencies, such as Bitcoin, use energy-intensive, high-powered computers in their production and validation.

New room for Indigenous partnership and leadership is core to success given the anticipated pace and scale of grid buildout. B.C.’s upcoming Call for Power this spring and Quebec’s call for financial partnerships with Indigenous communities both signal a growing commitment to a collaborative approach. British Columbia has also put up $140 million to support Indigenous-led power projects through the BC Indigenous Clean Energy Initiative.

But what about the rest of Canada?

Electricity planning will look different in provinces with partially or fully deregulated electricity markets like Ontario and Alberta. But these provinces are also adapting: Ontario has made a historic intervention that provides clear guidance to its system operator, amounting to a similar level of ambition seen in B.C. and Quebec.

Utilities are moving quickly, not only to expand and modernize their grids, but also to make them more resilient, more affordable, and smarter — better able to handle and shift peak demand loads.

Hydro-Québec is focusing on enhancing grid reliability and affordability, while B.C. is conducting smart-grid and load-shifting trials, like bidirectional charging.

Ontario and B.C. offer incentives for consumers to reduce consumption in real time (BC Hydro’s Peak Rewards program, Hydro One’s myEnergy rewards). The potential of such demand-side management was shown only just recently in Alberta. In response to an emergency request, customers shaved 150 megawatts off demand and saved the system from rolling blackouts. Proactively integrating demand-side management in the future could enhance the stability and resilience of Alberta's grid and make existing energy resources go further as demand grows.

The time is right for every province in Canada to build the bigger, smarter grids needed for a sustainable future. Utilities are starting to take big steps in the right direction.

Kate Harland is the research lead, mitigation, for the Canadian Climate Institute, where she currently leads research on energy affordability, building heat decarbonization and utility regulation on the path to net zero. She is an external energy adviser to the BC Hydro Task Force. Kate holds a master's of science (Cambridge University) and a master's of public policy (Simon Fraser University) and lives and works in Vancouver, B.C.