September 22, 2026

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By Lucas Bettle

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• Canada is expanding natural-gas-fired power capacity, raising questions about compatibility with net-zero emissions targets.

• Despite a grid dominated by hydropower, natural gas accounts for 17.1% of electricity generation capacity.

• New natural-gas projects plan an additional capacity of 7.22 GW, a 27% increase over current levels.

• Major new plants: Greenlight Electricity Centre in Alberta and Riverside Generating Station in Ontario.

• Effective carbon capture and storage technologies are crucial to align natural gas developments with Canada’s climate commitments.

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Canada has one of the world’s lowest-emitting grids thanks largely to hydropower. However, natural gas still makes up a large share of electricity generation, and a new wave of natural-gas-fired plants is in development. Does this growth clash with the nation’s net-zero goals, or can claimed carbon capture and storage (CCS) technologies truly make natural gas green?

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Canada’s Current Natural-Gas-Fired Electricity Generation Landscape

 

n 2023, Canada produced 620 TWh of electricity, with 153 GW of installed generation capacity. Natural gas accounts for 17.1% of that capacity (26 GW), making it a major outlier in a grid dominated by renewable hydro generation at 61% and growing wind and solar generation. (Electricity Canada, 2025)

 

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Canada is now building natural-gas-fired generation capacity beyond this baseline to support electrification and industrial growth. However, burning natural gas, like any other fossil fuel, emits CO2. The Government of Canada has made a commitment to reach net-zero emissions by 2050, with a 2030 target to reach 40 to 45% below 2005 emissions. (Government of Canada, 2022) This increased growth could clash with these goals.

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Escalating Natural-Gas-Fired Development

 

Canada has numerous natural-gas-fired power projects planned and underway. A total of 7.22 GW of new capacity is in the pipeline, a 27% increase over current capacity. These projects are laid out over the next several years, with 0.37 GW under construction, 3.53 GW in pre-construction, and 3.32 GW announced. (Global Energy Monitor, 2025)

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Many of these projects are significant in scale, with notable examples including:

• The 1,864 MW Greenlight Electricity Centre in Sturgeon County, Alberta (Kineticor Resource Corp, 2025)

• The 500 MW Riverside Generating Station Project in St. Clair Township, Ontario (Impact Assessment Agency of Canada, 2025a)

• The 500 MW Canada Centre Village RIGS in Centre Village, New Brunswick (Impact Assessment Agency of Canada, 2025b)

• The 465 MW Moraine Power Generation Project in Woodlands County, Alberta (Moraine Power, 2025)

• The 460 MW Flipi Gas-Fired Generation Project in Ponoka County, Alberta (Alberta Major Projects, 2025)

• The 370 MW Aspen Power Station in Lanigan, Saskatchewan, already under construction (SaskPower, 2025)

 

These major projects span across various provinces, showing nationwide growth in natural-gas-fired electricity generation despite a supposed commitment to reducing emissions.

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Why Natural Gas Plants Are Still Being Built in Canada

 

Planned natural-gas-fired plants seek to address a variety of challenges in Canada’s electrical grid. One of the primary drivers is that natural gas provides dispatchable capacity, power sources that grid operators can turn on, increase, or decrease to match demand in real time. This makes natural gas ideal for reserve margins as demand grows and legacy units retire, such as the phase-out of remaining coal plants. (NERC, 2025)

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Wind and solar capacity are both growing rapidly in Canada. While this helps work toward net-zero emissions goals, net-load variability and forecast challenges must be addressed. Wind and solar electricity generation depend on weather conditions at any given time, making it difficult to forecast generation. This means that the net electricity load left for the grid to supply after accounting for wind and solar will vary over time. Operating reserves and ramp-capable capacity must be available to maintain grid stability. (Ela, 2011)

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Electrification is also driving demand in Canada. Many homes are switching to electrified heating thanks to efficient and cold-weather-capable heat pumps. (Natural Resources Canada, 2025) The overall emissions impact here is positive, as using electricity solely from natural-gas-fired plants to power heat pumps would still be more efficient than heating homes directly with natural gas. However, that still means higher electricity demand.

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The electrification of heating in Canada poses a unique challenge due to its cold climate. Heat pumps don’t add a uniform load to the grid. Instead, they are highly seasonal, with usage spikes as temperatures drop. This means that cold-weather events can put immense strain on the grid, and dispatchable capacity is necessary to meet that demand. (NERC, 2025)

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The growth of AI data centres has become another driving factor, with a variety of large projects planned in Canada. The large, concentrated loads are difficult to serve with incremental grid upgrades, instead demanding rapid construction and high capacity for which natural-gas-fired plants are well-suited. In 2024, data centres consumed 415 TWh globally, and this is expected to increase rapidly over the coming years. (International Energy Agency, 2025)

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Some projects, such as the Greenlight Electricity Centre, explicitly cite AI data centre energy consumption as a primary reason for their construction. (Kineticor Resource Corp, 2025) With the Canadian Sovereign AI Computer Strategy alone already having committed $2 billion toward AI growth, it’s clear that the political landscape is putting pressure on federal and provincial governments to tolerate short-term growth in fossil fuel generation to avoid missing out on this rapidly growing industry. (Government of Canada, 2025)

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Canada’s Net-Zero Goals and Regulations on Natural Gas Generation

 

With a goal of reaching net-zero by 2050, the Government of Canada has established a variety of regulations aimed at addressing natural-gas-fired electricity generation. However, these rules largely focus on carbon capture and storage requirements, with significant controversy over the effectiveness and long-term viability of these mitigations.

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Environment and Climate Change Canada’s Clean Electricity Regulations include a framework that will limit emissions regardless of generation source starting in 2035. Units with a capacity of 25 MW or higher will face an annual emissions limit of 65 tCO2/GWh, which is significantly lower than the 350 to 500 tCO2/GWh of typical, unmitigated, natural-gas-fired generation. The regulation, as it stands today, will reduce emissions limits to zero in 2050. (Government of Canada, 2024)

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However, the regulation does allow electricity system operators (utility companies) to pool credits when emissions are below annual emissions limits. These credits are transferable between units, so an electricity system operator with low or zero-emission units can offset units that exceed the annual emissions limit. The credits are valid for five calendar years and must be used before 2050. (Government of Canada, 2025)

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Operators can also take advantage of domestic carbon offset units to reduce a unit’s attributed emissions. These are tradeable credits that can be generated by eligible projects that reduce or remove greenhouse gas emissions. (Government of Canada, 2024) Many different types of projects can generate credits, such as landfill methane recovery and forest management on private land.

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While the Clean Electricity Regulations may lay out a roadmap aimed at net-zero emissions, their emission limits don’t come into effect until 2035. Even then, it will allow for significant flexibility in continuing natural-gas-fired power generation.

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Other government action focuses on economic incentives. The Carbon Capture, Utilization, and Storage (CCUS) Income Tax Credit supports eligible capture, transport, and storage investments. (Government of Canada, 2024) The federal government has also implemented a carbon pricing trajectory that will see the tax burden on emitters rise over time. (Government of Canada, 2021)

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Planned Carbon Capture and Storage Efforts

 

Many planned natural-gas-fired generation projects in Canada claim they will incorporate carbon capture and storage technology to reduce emissions. Some have these technologies integrated as part of the plant design, with an explicit capture process and target removal rate.

 

However, others are billed as “CCS-ready”, with plant layouts that provide the opportunity for future CCS equipment integration but no finalized plans for investment and installation or carbon storage.

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• Greenlight Electricity Centre: Described as CCS-ready with no current CCS implementation plan

• Riverside Generating Station Project: No stated CCS plans

• Centre Village RIGS: No stated CCS plans

• Moraine Power Generation Project: Design includes amine-based absorption CO2 capture

• Flipi Gas-Fired Generation Project: CCS initially planned, but was subsequently removed from the plant design

• Aspen Power Station: Described as CCS-ready with no current CCS implementation plan

 

There are a variety of carbon capture and storage projects planned and currently operational in Canada today. In Alberta, 9.8 million tonnes of CO2 have been sequestered since 2015 through projects such as Shell Quest. (Alberta Energy Regulator, 2025)

 

Phase 2 of the Glacier Gas Plant has set targets to capture 160,000 tonnes per year of CO2, with subsequent sequestration in a saline formation. (Alberta Major Projects, 2024) They claim that their CCS technology will capture 90% of CO2 emissions from the facility. (Entropy Inc. , 2024)

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While CCS has been established in some capacity in Canada for a decade, it remains to be seen whether new plants will integrate it in a way that addresses emissions sufficiently to align natural-gas-fired generation with net-zero emissions goals.

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Are Carbon Capture and Storage Technologies Effective?

Carbon capture and storage uses a variety of technologies to remove CO2 from plant exhaust and permanently store it. The cost, energy efficiency, and effectiveness of these technologies are all important details that affect whether they can practically address natural-gas-fired plant emissions.

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Amine-based absorption is the dominant commercial technology for removing CO2 from plant emissions. Flue gas passes through an absorber, where CO2 binds to a solvent. The solvent is then heated to strip the CO2, releasing it in a concentrated form that can be compressed. The solvent is then recycled through the process again. (Dziejarski, 2023)

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This is the technology planned to be implemented at the 465 MW Moraine Power Generation Project in Woodlands County, Alberta, with Moraine Power claiming 90 to 95% removal can be achieved. (Moraine Power, 2025)

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However, this approach is energy-intensive, in part due to the relatively lower CO2 concentration in natural-gas-fired plant exhaust compared to coal flue gas, where the technology has been widely used. Achieving 95% CO2 requires a minimum of 2.43 GJ/tonne CO2, roughly 15% of the fuel’s energy. (Abreu, 2025)

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Membrane-based CO2 capture is an emerging technology. It uses thin films of semi-permeable materials that selectively separate CO2. This method dramatically reduces energy requirements, as heat is not required for solvent regeneration. However, low partial pressure of CO2 in flue gas requires very high-performance membranes, often with multi-stage configurations. Compressors and vacuum pumps are also required to achieve effective separation. (Gkotsis, 2023)

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Amine-based absorption ranges from 44-71 USD/tCO2 (Park, 2025), while membrane removal ranges from 60-80 USD/tCO2 when handling the dilute exhaust streams typical of natural-gas-fired power plants. (Micari, 2025)

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Canada’s Continued Natural-Gas-Fired Generation Growth Casts Doubt on Net-Zero Goals

 

The need for reliable grids backed by dispatchable generation in the face of increasing electrification and major loads like AI data centres is currently driving Canada to increase natural-gas-fired power plant construction. While CCS technology promises significant emissions reduction, the practicality of implementation and commitment from plant operators remains unclear.

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While various regulations provide economic pressure by increasingly taxing emissions and incentivizing CCS, there are no hard limits in place. It will be nearly 10 years until limits set by the Clean Electricity Regulations come into effect, and even then, both credits and offsets provide ample opportunity for natural-gas-fired generation to persist.

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Canada has made a commitment to reach net-zero emissions by 2050, but has shown willingness to compromise when short-term challenges and opportunities make fossil fuels an attractive choice. With fewer than 25 years left to reach that target, the government must make stronger commitments today to make it a reality.

 

References

Abreu, M. B. (2025). High CO₂ removal with aqueous piperazine at the NCCC pilot plant under NGCC conditions. International Journal of Greenhouse Gas Control.

 

Alberta Energy Regulator. (2025). Retrieved from Carbon Capture, Utilization, and Storage (CCUS): https://www.aer.ca/data-and-performance-reports/statistical-reports/alberta-energy-outlook-st98/carbon-capture-utilization-and-storage-ccus

 

Alberta Major Projects. (2024). Glacier Gas Plant CCS (Phase 2). Retrieved from https://majorprojects.alberta.ca/details/Glacier-Gas-Plant-CCS-Phase-2/10567

 

Alberta Major Projects. (2025). Kiwetinohk Flipi Gas Plant. Retrieved from https://majorprojects.alberta.ca/details/Kiwetinohk-Flipi-Gas-Plant/11536

 

Dziejarski, B. K. (2023). Current status of carbon capture, utilization, and storage technologies in the global economy: A survey of technical assessment. Fuel.

 

Ela, E. M. (2011). Operating Reserves and Variable Generation. National Renewable Energy Laboratory.

 

Electricity Canada. (2025). Electricity 101. 

 

Entropy Inc. (2024). Glacier. Retrieved from https://www.entropyinc.com/glacier

 

Gkotsis, P. (2023). Membrane-Based Technologies for Post-Combustion CO2 Capture from Flue Gases: Recent Progress in Commonly Employed Membrane Materials. Membranes.

 

Global Energy Monitor. (2025). Global Oil & Gas Plant Tracker. Retrieved from https://globalenergymonitor.org/projects/global-oil-gas-plant-tracker/

 

Government of Canada. (2021). Update to the Pan-Canadian Approach to Carbon Pollution Pricing 2023-2030. Retrieved from https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/carbon-pollution-pricing-federal-benchmark-information/federal-benchmark-2023-2030.html

 

Government of Canada. (2022). Canadian Net-Zero Emissions Accountability Act. Retrieved from https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/net-zero-emissions-2050/canadian-net-zero-emissions-accountability-act.html

 

Government of Canada. (2024). Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC). Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/business-tax-credits/clean-economy-itc/carbon-capture-itc.html

 

Government of Canada. (2024). Clean Electricity Regulations (SOR/2024-263). Retrieved from https://laws-lois.justice.gc.ca/eng/regulations/SOR-2024-263/FullText.html

 

Government of Canada. (2025). Canada’s clean electricity future. Retrieved from https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/clean-electricity.html

 

Government of Canada. (2025). Canadian Sovereign AI Compute Strategy. Retrieved from https://ised-isde.canada.ca/site/ised/en/canadian-sovereign-ai-compute-strategy

 

Impact Assessment Agency of Canada. (2025a). Riverside Generating Station Project. Retrieved from https://iaac-aeic.gc.ca/050/evaluations/proj/89801?culture=en-CA

 

Impact Assessment Agency of Canada. (2025b). Centre Village Renewables Integration & Grid Security (RIGS). Retrieved from https://iaac-aeic.gc.ca/050/evaluations/proj/89719?culture=en-CA

 

International Energy Agency. (2025). AI is set to drive surging electricity demand from data centres. Retrieved from https://www.iea.org/news/ai-is-set-to-drive-surging-electricity-demand-from-data-centres-while-offering-the-potential-to-transform-how-the-energy-sector-works

 

Kineticor Resource Corp. (2025). Greenlight Electricity Centre. Retrieved from https://kineticor.ca/operation/greenlight-electricity-centre/

 

Micari, M. (2025). Energy- and cost-efficient CO2 capture from dilute emissions by pyridinic-graphene membranes. nature sustainability.

 

Moraine Power. (2025). Moraine Power Generation Project. Retrieved from https://morainepower.ca/

 

Natural Resources Canada. (2024). Electricity Generation Energy Use and Generation by Energy Source. Retrieved from https://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/showTable.cfm?type=HB&sector=egen&juris=00&year=2022&rn=1&page=0

 

Natural Resources Canada. (2025). Heat pumps uptake at a glance. Retrieved from https://prod-natural-resources.azure.cloud.nrcan-rncan.gc.ca/energy-efficiency/home-energy-efficiency/canada-greener-homes-initiative/heat-pumps-uptake-glance-0

 

NERC. (2025). 2024 Long-Term Reliability Assessment. North American Electric Reliability Corporation.

 

NERC. (2025). 2025–2026 Winter Reliability Assessment. North American Electric Reliability Corporation.

 

Park, J. W. (2025). Membrane-Based CO2 Capture Across Industrial Sectors: Process Conditions, Case Studies, and Implementation Insights. Membranes.

 

SaskPower. (2025). Aspen Power Station. Retrieved from https://www.saskpower.com/our-power-future/infrastructure-projects/construction-projects/planning-and-construction-projects/aspen-power-station