“If we want things to stay as they are, things will have to change.”
― Giuseppe Tomasi di Lampedusa, The Leopard
So far in 2026, it appears that, compared to 2025, volatility and uncertainty are increasing – geopolitical events have resulted in damage and disruption to energy and digital infrastructure, shipping routes, and global supply chains while tariff and trade relationship uncertainty has continued.
With a specific focus on energy, attendees of the 2026 International Energy Agency (IEA) Ministerial noted “the importance of multilateral cooperation and that global energy systems face heightened and more complex risks, driven by geopolitics, supply chain vulnerabilities, extreme weather events and cyber security.” Further, “Ministers noted that energy security is integral to national security and acknowledged the importance of ensuring diversification, predictability, affordability and international collaboration,” and “recognised the growth of electricity demand and electricity's expanding role in energy systems.”
The conclusions of the attendees are well grounded, as energy infrastructure has been exposed as vulnerable from both a physical security and cyber security perspective over the past several years. As a result, countries are concluding that it is essential to take steps to achieve energy independence and security in order to achieve economic security and independence.
For example, on March 13, 2026, in the foreword for a new policy to advance the nuclear industry in the United Kingdom, Prime Minister Keir Starmer wrote that “The world has become more dangerous and we face threats to our national and economic security that are unprecedented in recent memory. For strategic energy independence, national security and the climate, an expanded nuclear industry is simply indispensable.”
In response to combining economic and energy security, the UK (on March 11) announced proposals to improve the connection process to the electricity grid, including proposals to “prioritise government‑identified strategic demand projects.” On March 15, the government announced a series of measures “in the pursuit of national energy security as a response to events in the Middle East.” On March 25, the government published its Next steps for electricity interconnection in Great Britain policy paper stating “Strengthening electricity interconnection is also essential to boosting the UK’s energy security. Interconnection enables us to draw on renewable generation across Europe, reducing our exposure to volatile global oil and gas markets and shielding consumers from sudden price shocks.”
And on March 27, the government initiated its Reshaping cyber regulation in downstream gas and electricity consultation, stating “With every aspect of our society relying on a strong and reliable energy system, our Downstream Gas and Electricity (DGE) operators must be resilient to evolving cyber threats […] To protect consumers, reach our net zero goals and maintain a strong, resilient energy network, cyber security is essential. System-wide cyber resilience is increasingly important, particularly at this time of heightened geopolitical uncertainty, as the threats that we face are evolving. The protection of, not only our essential services, but also our businesses, is key.” (emphasis added)
The reality is clear: the economic and energy landscape is being turned upside down. And if countries, like Canada, want things to stay the same (e.g., rising living standards, energy security, financial and economic stability and growth), then things are going to have to change (significantly) here, too.
And they are.
Much To Do About Everything: An Evolving Economic-Energy-Security Planning and Policy Paradigm
Across Canada, significant policy and regulatory work is underway in an attempt to address a more volatile environment as well as meet future energy needs (particularly through electrification of many sectors of the economy) in ways that fuel economic growth in an expedited, stable, secure (both physical and cyber related), reliable, resilient, and affordable manner. Satisfying this broad range of demands while also maintaining some degree of independence from external shocks is a monumental task for all players in the electricity sector.
Earlier this year, Prime Minister Mark Carney stated that the federal government will be releasing a draft national electricity strategy with the objective “to more than double the size of Canada’s electricity grid, increase Canada’s energy advantage, and deliver cleaner, more reliable, and more affordable power for Canadians.”
Doubling the size of the electricity grid may seem like hyperbole (and will be very challenging), but the future is still pushing towards electrification. The Canada Energy Regulator’s recent outlook (published March 17), Canada’s Energy Future 2026, models scenarios showing electricity demand increasing between 26% to 85% from 2023 to 2050. Similarly, Ontario’s Independent Electricity System Operator (IESO) published (on March 20) its Annual Planning Outlook that had a reference demand forecast of 65% growth by 2050, with a high demand scenario of 92% through 2050. Even the low-demand scenario indicated demand growing by about 38% by 2050. Planning to meet any of these demand outlooks requires significant investments in generation, transmission, distribution and demand-side management.
In January 2026, Manitoba Hydro’s Integrated Resource Plan (IRP) was published, stating “[a]s demand grows, Manitoba Hydro is projecting a shortfall in firm electricity capacity by the end of 2030, potentially reaching 600 megawatts.” Manitoba has for years had both surplus capacity and energy.
Some of this new demand will be created from substantial infrastructure investments linked to national security and economic security. For example, one of the most significant recent announcements occurred on March 12, 2026 with the federal government announcing more than $35billion in investments “to defend, build, and transform Canada’s Northern and Arctic region,” including referring some projects to the Major Projects Office. During March, Ontario released an updated critical minerals strategy to advance mining and mineral exploration (e.g., the Ring of Fire), stating “[c]ritical minerals have moved from commodity markets to the centre of economic and national security strategy. Demand is rising— driven by electrification, artificial intelligence, advanced manufacturing, defence modernization, and the global energy transition.”
Will these energy needs be met? We noted previously that this environment of extreme volatility and uncertainty, coupled with need to meet expected significant increases in electricity demand, is creating a need for more proactive approaches to system investment. For example, we have previously referenced the proactive planning proceeding in New York State. This proceeding has the objective of creating “a unified process” for New York’s major investor-owned electric utilities “to proactively accommodate geographically-specific projected growth of transportation and building electrification while considering economic development, deployment of DERs, and emerging customer needs. Over time, the intent is for these granular load assessment approaches and their supporting data sources to increasingly inform and integrate into existing forecasts performed at the asset level (e.g., feeder, network, or substation).” The proceeding will culminate with the electric utilities preparing a Proactive Planning Report Study “identifying the grid needs driven by electrification for which proactive investment would improve overall cost-effectiveness, minimize ratepayer impacts, and support policy outcomes,” to be filed no later than September 2026.
The necessity to build on a proactive basis is being recognized in Canada. Ontario’s 2025 Integrated Energy Plan (IEP) noted that the government would direct the “IESOin consultation with transmitters andLDCs [distribution utilities], to proactively identify transmission and distribution bottlenecks that could delay major housing, industrial, or economic development projects.” (emphasis added)
Similarly, BC Hydro’s 2025 IRP states “preparing for uncertainty is a foundational aspect of this 2025 IRP […] Within this context, a “just in time” approach to meeting demand is not prudent.” (emphasis added)
Critical Next Steps
The biggest policy challenge of all will be translating announcements, agreements, and aspirations into concrete and tangible progress.
In particular, seeking to aggressively expedite approval processes for major electricity infrastructure, such as large-scale transmission and generation projects will be a challenge. Conflicting stakeholder views on both regulatory streamlining in general and specific projects are to be expected. Governments, however, must take care to not exacerbate opposition by failing to undertake meaningful engagement and consultation in the push to streamline the approval process. All levels of government (and their associated entities, such as regulators), along with project developers, First Nations, and other stakeholders, will need to engage and come to a mutual understanding on the changes and mechanisms required to expedite approvals to move critical energy (and other infrastructure) projects forward expeditiously. Time is of the essence in moving this policy forward.
What this means is that any policy that accelerates the approval process must continue to incorporate practical and effective oversight and consultation as projects advance from identification to planning to execution to completion. Such a process will provide the safeguards and incentives to better ensure that projects achieve in-service status within expected timeframes, stay within expected budgets, comply with environmental requirements, and deliver the expected benefits. Canada needs to leverage existing best practices to the greatest extent possible. Fortunately, there is a wealth of best practice large project literature, including the governance of large projects as well as the benefits of making megaprojects modular rather than customized, that is available to policymakers.
Furthermore, the regulatory framework and policy objectives will likely need to find ways to incorporate economic and national security challenges into both traditional economic analysis, as well as the decision-making and approval processes for large energy projects. This may require enhanced and expanded investments where power networks are most exposed to physical, trade, cyber, and political risks. This will likely require investments in the energy sector that are not solely centered around short-term (or medium-term) demand growth trends.
Overall, the electricity system will require some time to transition from stable, steady-state, just-in-time infrastructure delivery to a forward-looking, proactive approach that considers other factors such as the value of redundancy, excess capacity for near-term future economic growth, support for other foundational critical infrastructure (e.g., water, transportation, digital), and the flexibility to meet rapidly changing public needs and external shocks. The orthodoxy of planning – particularly electricity infrastructure investments – predominantly around short-term demand forecasts is likely going to change to incorporate broader factors that policymakers support.
These are challenging times requiring challenging solutions. However, if we want things to stay the same (and continue to improve), then many things need to change.
“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
― Lewis Carroll, Through the Looking-Glass
Please contact Power Advisory if you have any questions or would like any additional information.