Appendix 2: Technology Assumptions

This appendix outlines key technology assumptions included in the Current Measures, Global Net-zero, and Canada Net-zero Scenarios. The percent changes in the assumptions are relative to 2021 unless otherwise noted. All costs are in $2022 CAD unless otherwise noted.

Table A2.1: Key Technology Assumptions

Key Technology Assumptions
	Global Net-zero	Canada Net-zero	Current Measures
Buildings
Heat pumps^{Table Note a}	Cost declines 15% by 2030 and 40% by 2050.	Cost declines 13% by 2030 and 34% by 2050.	Cost declines 7% by 2030 and 20% by 2050.
Building shell^Definition*	Efficiency of new buildings improves 80% by 2050.	Efficiency of new buildings improves 80% by 2050.	Efficiency of new buildings varies regionally from 20-50% by 2050.
Hydrogen and renewable natural gas (RNG) blending	Hydrogen: Maximum blending of 20% by volume, which occurs where economics are favourable. RNG: feedstock supply constraints limit blending up to 10-15% of natural gas content by 2050.		Hydrogen price remains high and thus no blending occurs. RNG: only provinces with RNG mandates.
Heavy industry
Carbon capture, utilization, and storage (CCUS)^{Table Note b}	Capture costs are different by industry and range from $45-200/tCO₂ by 2030 and $30-160/tCO₂ from 2030-2050.		Capture costs are different by industry and range from $45-200/tCO₂ through the projection period.
Iron and steel: electric arc furnaces (EAF)	Some facilities transition from coal to EAF^{Table Note c} and from coal to direct reduced iron EAF.^{Table Note d}
Hydrogen in steel production: Hydrogen direct reduced Iron (H2-Dri)^{Table Note e}	Assume availability of technology at scale and adoption of economic conditions allow.		Assume technology is not available at scale.
Aluminum production: Inert anodes^{Table Note f}	20% adoption by 2030 and a linear incline to 100% by 2050.		20% adoption of inert anodes.
Hydrogen and renewable natural gas blending	Hydrogen: Maximum blending of 20% by volume, blending occurs where economics are favourable. RNG: supply constraints limit blending up to 10-15% of natural gas content by 2050.		Hydrogen price remains too high for blending to occur. RNG: only provinces with RNG mandates.
Transportation
Passenger battery electric vehicles^{Table Note g}	Vehicle cost declines from by 30% by 2030 and 38% by 2050 (compared to $40-60,000 currently).	Vehicle cost declines 28% by 2030 and 36% by 2050.	Vehicle cost declines 26% by 2030 and 33% by 2050.
Medium and heavy-duty hydrogen fuel cell trucks^{Table Note h}	Fuel cell truck costs fall steadily, approaching parity with diesel vehicles in the 2035-2050 period (approximately $150,000 to $200,000 for a Class 8 diesel truck).		Fuel Cell truck costs remain near current levels.
Medium and heavy-duty battery electric trucks^{Table Note i}	Battery electric truck costs fall steadily, approaching parity with diesel vehicles in the 2035-2050 period (approximately $150,000 to $200,000 for a Class 8 diesel truck).		Battery electric and fuel cell truck costs remain near current levels.
Sustainable aviation fuel^{Table Note j}	Following IEA WEO international context, 40% of jet fuel needs met with bioenergy, 30% with hydrogen-based aviation fuel by 2050.		Not included.
Electricity Generation
Wind electricity^{Table Note k}	Capital cost declines from $1,900/kW in 2020 to $1,752/kW by 2030 and $1,630/kW by 2050 (14% below 2020).	Capital cost declines from $1,900/kW in 2020 to $1,763/kW by 2030 and $1,668/kW by 2050 (12% below 2020).	Capital cost declines from $1,900/kW in 2020 to $1,791/kW by 2030 and $1,736/kW by 2050 (9% below 2020).
Solar electricity^{Table Note l}	Capital cost declines from $1,400/kW in 2020 to $790/kW by 2030 and $535/kW by 2050 (62% below 2020).	Capital cost declines from $1,400/kW in 2020 to $840/kW by 2030 and $585/kW by 2050 (58% below 2020).	Capital cost declines from $1,400/kW in 2020 to $905/kW by 2030 and $675/kW by 2050 (52% below 2020).
Battery storage (4 hr)^{Table Note m}	Capital cost declines from $2,198/kW in 2020 to $952/kW by 2030 and $549/kW by 2050 (75% below 2020).	Capital cost declines from $2,198/kW in 2020 to $1,261/kW by 2030 and $925/kW by 2050 (58% below 2020).	Capital cost declines from $2,198/kW in 2020 to $1,563/kW by 2030 and $1,506/kW by 2050 (32% below 2020).
Natural gas combined cycle with CCS^{Table Note n}	Capital cost declines from $3,705/kW in 2020 to $2,625/kW by 2030 and $2,075/kW by 2050 (44% below 2020).	Capital cost declines from $3,705/kW in 2020 to $3,005/kW by 2030 and $2,530/kW by 2050 (32% below 2020).	Capital cost declines from $3,705/kW in 2020 to $3,385/kW by 2030 and $2,990/kW by 2050 (19% below 2020).
Nuclear small modular reactors^{Table Note o}	Capital cost declines from $9,262/kW in 2020 to $8,348/kW by 2030 and $6,519/kW by 2050 (30% below 2020).	Capital cost declines from $9,262/kW in 2020 to $8,348/kW by 2030 and $6,519/kW by 2050 (30% below 2020).	Capital cost declines from $9,262/kW in 2020 to $8,595/kW by 2030 and $7,400/kW by 2050 (20% below 2020).
Oil and Gas Production
Carbon capture, utilization, and storage^{Table Note p}	Capture costs range from $45-125/tCO₂ by 2030 and $30-90/tCO₂ from 2030-2050.
Oil sands process efficiency	Oil sands process efficiency improves by 1% per year.
Hydrogen
Electrolyzer^{Table Note q}	Capital cost declines 80% by 2030 and 84% by 2050.	Capital cost declines 74% by 2030 and 82% by 2050.	Capital cost declines 62% by 2030 and 70% by 2050.
Natural gas with CCUS	Capital cost declines 25% by 2030 and 40% by 2050.		Capital cost declines 20% by 2030 and 25% by 2050.
Biomass	Capital cost declines 18% by 2030 and 25% by 2050.		Capital cost declines 16% by 2030 and 20% by 2050.
Transportation and distribution of hydrogen	We assume appropriate transmission and distribution networks gets built to safely and reliably transport hydrogen from producers to consumers, to enable hydrogen adoption throughout the energy system.
Carbon Management and Non-energy GHG Emissions
Direct air capture^{Table Note r}	Capture cost declines to $330/tCO₂ by 2035 and $230/tCO₂ by 2050.	Capture cost declines to $350/tCO₂ by 2035 and $250/tCO₂ by 2050.	Capture cost remains at $400 to $450/tCO₂ over the projection period.
Land-use, land-use change, and forestry (LULUCF)^{Table Note s}	30 and 50 million tonnes of carbon dioxide equivalent (Mt of CO₂e) removed by 2030 and 2050, respectively. This assumption is based on a literature review of other Canadian net-zero projections and on the feasibility of nature-based climate solutions in Canada, including Nature-Based Climate Solutions from the Council of Canadian Academies.		13 megatonnes (MT) of CO₂e removed by 2030 and kept at same level to 2050. Consistent with recent projections from Environment and Climate Change Canada (ECCC).
Waste^{Table Note t}	Assumes GHG emissions from solid waste disposal are reduced by 45% below 2020 levels by 2030, in line with the estimated impact of proposed landfill methane regulations. Assumes additional reductions are achieved by 2050 to a level of 57% below 2020 levels via other waste diversion and reduction measures.		Waste and GHG emissions generation intensity factors follow historical 2001 to 2021 trends for 2022 to 2050, based on the 2023 national inventory report (NIR) data.
Non-energy agriculture^{Table Note u}	GHG emissions intensity of enteric fermentation,^Definition* manure management, and agricultural soils activities declines as of 2023 to a conservative average of 23% below Current Measures Scenario levels in 2050, based on a review of the literature. Also assumes the Government of Canada’s fertilizer emissions reduction target of 30% below 2020 levels by 2030 is met, then increases linearly to a 40% reduction by 2040 and 50% by 2050.		Animal and crop production activities’ GHG emissions intensity factors follow historical 2001 to 2021 trends for 2022 to 2050 if negative (based on 2023 NIR 2023 data), or decline at 0.25%/yr.
Sources and notes: Table Note a IEA World Energy Outlook 2022, NREL Electrification Futures Study Return to table note a referrer Table Note b Various sources including: Global CCS Institute, Leeson et al 2017, International CCS Knowledge Centre, IEA Levelized cost of CO₂ capture Return to table note b referrer Table Note c For an example of coal to EAF see Algoma Steel Return to table note c referrer Table Note d For an example of coal to direct reduced iron EAF see ArcelorMittal Dofasco Return to table note d referrer Table Note e IEA Clean Energy Technology Guide Return to table note e referrer Table Note f For an example of intert anodes see Elysis Carbon-Free Aluminum Facility Return to table note f referrer Table Note g IEA World Energy Outlook 2022, EIA Annual Energy Outlook 2022 Return to table note g referrer Table Note h EPRI US-REGEN Documentation Version 2021 LCRI, On-Road Fleet Vehicles Return to table note h referrer Table Note i EPRI US-REGEN Documentation Version 2021 LCRI, On-Road Fleet Vehicles Return to table note i referrer Table Note j IEA World Energy Outlook 2022, Canada’s Aviation Climate Action Plan Return to table note j referrer Table Note k NREL Annual Technology Baseline, IEA World Energy Outlook 2022 Return to table note k referrer Table Note l NREL Annual Technology Baseline, IEA World Energy Outlook 2022 Return to table note l referrer Table Note m NREL Annual Technology Baseline, IEA World Energy Outlook 2022 Return to table note m referrer Table Note n NREL Annual Technology Baseline, IEA World Energy Outlook 2022 Return to table note n referrer Table Note o NRCan 2020, NREL Annual Technology Baseline Return to table note o referrer Table Note p Various sources including: Global CCS Institute, Leeson et al 2017, International CCS Knowledge Centre, IEA Levelized cost of CO₂ capture, Quest Carbon Capture and Storage Project: Annual Report, Ordorica-Garcia, et al 2011 Return to table note p referrer Table Note q IEA World Energy Outlook 2022 Return to table note q referrer Table Note r EPRI US-REGEN Documentation Version 2021 LCRI, IEA Direct Air Capture 2022 Return to table note r referrer Table Note s Canada’s 8th National Communication and 5th Biennial Report 2022, Canada’s LTS submission to the UNFCCC 2022, CCA NBCS 2022, Drever et al. 2021, Smith 2020 Return to table note s referrer Table Note t Canada’s 8th National Communication and 5th Biennial Report 2022, Canada’s 2030 emissions reduction plan, Chapter 3 2022 Return to table note t referrer Table Note u McKinsey, Agriculture and climate change 2020, RBC, The Next Green Revolution 2022, SPI, NZ: Implications for Canadian Agriculture 2021, Trottier, Canadian Energy Outlook 2021 Return to table note u referrer

Date modified:: 2023-11-29

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Appendix 2: Technology Assumptions

Table A2.1: Key Technology Assumptions