Canada Thermal Power - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

Canada thermal power market size in 2026 is estimated at 31.69 gigawatt, growing from 2025 value of 32.10 gigawatt with 2031 projections showing 29.71 gigawatt, growing at -1.27% CAGR over 2026-2031. This report is Segmented by Fuel Type (Coal-Fired, Natural Gas-Fired, and Oil-Fired), Technology (Steam Cycle-Based, Gas Turbine/Combined Cycle, and Combined Heat and Power), Combustion Method (Pulverized Fuel, Gasification, Turbine-Based Combustion, and More), and Application (Utility-Scale, Industrial Captive, and More). The Market Sizes and Forecasts are Provided in Terms of Installed Capacity (GW).

Canada Thermal Power Market Trends and Insights

Aging Coal Fleet Replacements With High-Efficiency CCGT Plants

Ottawa’s 2030 coal ban compressed a decade of retirements into six years, forcing utilities to swap 8 GW of coal with dispatchable alternatives. Alberta finalized its coal exit in June 2024, and Saskatchewan shuttered Boundary Dam Units 4-6 the same year, leaving a reliability gap that only modern CCGT capacity can close. Capital Power’s 1,857 MW Genesee repowering, online since December 2024, sets a 64% thermal-efficiency benchmark and slices emissions intensity by 60%. The Clean Electricity Regulations permit compliant gas units to run to 2050, locking in 25-year revenue visibility and stimulating a USD 2 billion project pipeline. Developers are also designing new turbines with carbon-capture tie-ins or hydrogen co-fire options to future-proof assets against stricter post-2035 rules.

Increasing Grid-Reliability Concerns Amid Rising Variable Renewables

Alberta added more than 4 GW of wind and solar between 2023 and 2024, lifting renewable penetration above 20% on peak days and producing sub-hourly frequency swings that exposed the AESO to reserve shortfalls. The province’s delayed capacity market, now scheduled for 2027, aims to procure 4,500 MW of firm supply, with aeroderivative gas turbines favored for their ten-minute start capability. Ontario faces a parallel 3,000 MW supply gap by 2027 as Pickering nuclear retires and EV-driven load accelerates, pushing the IESO to contract fast-ramp peakers and batteries. January 2024 cold snaps saw Alberta pool prices spike to CAD 999/MWh, reinforcing the economic case for quick-start thermal flexibility.

Federal 2030 Coal Phase-Out Mandate

The coal ban removes 8 GW of capacity by end-2029, stranding CAD 2-3 billion in book value and triggering 8-12% retail-rate hikes in Alberta and Saskatchewan.

Other drivers and restraints analyzed in the detailed report include:

• LNG Export Growth Spurring Western-Canada Gas-Fired Capacity
• Provincial Carbon-Credit Floor Catalyzing Efficiency Retrofits
• Escalating Federal & Provincial Carbon Pricing

Segment Analysis

Natural gas-fired assets held 46.85% of the Canada thermal power plant market in 2025 and will climb at a 2.66% CAGR as CCGT replacements fill the coal vacuum. Coal capacity will collapse to negligible relevance by 2029, while oil-fired generation in Atlantic Canada and remote communities retreats below 5% share, squeezed by hydro imports and battery storage. Western Canada's abundant Montney supply anchors gas prices below CAD 3/GJ, keeping dispatch economics competitive even under rising carbon costs. The natural-gas slice of Canada's thermal power plant market size is projected at 17.53 GW in 2031, equivalent to 58.98% of fleet capacity. Hydrogen-ready turbines and CCUS tax incentives provide a hedge against future carbon tightening.

Regional supply dynamics reinforce the trend. Alberta's post-coal demand plus LNG Canada's load in British Columbia lock in 1.5-2 GW of greenfield gas builds through 2030. Oil-fired peakers at Coleson Cove and maritime diesel units face a rapid utilization decline once Churchill Falls exports scale. With no new coal or heavy-oil projects in the pipeline, natural gas secures the only positive growth path within the fuel mix.

Gas turbine and combined-cycle units made up 39.12% of installed capacity in 2025 and will advance at a 2.02% CAGR, buoyed by 64% thermal-efficiency benchmarks set by GE 7HA.03 turbines at Genesee. The Canada thermal power plant market size tied to CCGT technology is expected to reach 13.88 GW in 2031. CHP systems linked to oil-sands operations, although smaller, deliver the fastest 2.86% CAGR because waste-heat recovery pushes plant thermal efficiency past 75% and qualifies for provincial TIER credits. Steam-cycle coal stations, down to 2 GW by 2025, are on an irreversible exit trajectory.

Digital-twin analytics reduce forced outages and extend maintenance cycles, slicing LCOE by up to CAD 5/MWh. Aeroderivative simple-cycle units plug peak gaps and win capacity auctions thanks to zero-to-full-load ramps under ten minutes. Older 55-58% CCGTs become marginal unless retrofitted with dry-low-NOx combustors, hydrogen capability, or CCS modules.

Complete Report Scope:

• By Fuel Type
  • Coal-Fired Power Plants
  • Natural Gas-Fired Power Plants
  • Oil-Fired Power Plants
• By Technology
  • Steam Cycle-Based
  • Gas Turbine/Combined Cycle
  • Combined Heat and Power (CHP)
• By Combustion Method
  • Pulverized Fuel (PF) Combustion
  • Fluidized Bed Combustion
  • Gasification
  • Internal Combustion Engines
  • Turbine-Based Combustion
• By Application
  • Utility-Scale Thermal Plants
  • Industrial Captive Power Plants
  • Distributed Thermal Plants
  • Peaker Plants

List of Companies Covered in this Report:

• Emera Inc.
• TransAlta Corporation
• Ontario Power Generation Inc.
• Capital Power Corporation
• SaskPower International Inc.
• ATCO Power Ltd.
• Northland Power Inc.
• Maxim Power Corp.
• ENMAX Corporation
• Bruce Power LP
• NB Power Corporation
• Fortis Inc.
• TransCanada Energy Ltd.
• Pattern Energy (thermal division)
• Innergex (thermal assets)
• Kineticor Resource Corp.
• Heartland Generation Ltd.
• Canadian Utilities Ltd.
• Calgary Energy Centre Ltd.
• Suncor Energy (CHP)

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support