Europe and Canada are accelerating large-scale electrification through grid expansion, lower electricity costs, and clean power investment, positioning electricity infrastructure as a strategic asset for industrial growth, energy security, and decarbonization.
On July 16, the European Commission unveiled its Electrification Action Plan, targeting electricity to account for 46% of the EU’s final energy consumption by 2040, roughly double today’s share. The plan aims to reduce gas demand by around two-thirds, halve oil consumption, and cut annual fossil fuel import costs by approximately €260 billion by 2040.
Canada is pursuing a similarly ambitious path. In May 2026, Ottawa launched consultations on a National Electricity Strategy, branded Powering Canada Strong, that aims to double Canada’s electricity generation and grid capacity by 2050 through more than CAD 1 trillion in cumulative investment. The initiative responds to rapidly growing electricity demand from electric vehicles, AI data centres, advanced manufacturing, mining, and industrial electrification.
Together, the two initiatives reflect growing recognition that electricity infrastructure, not just renewable generation, has become a decisive competitive advantage in the global clean energy transition.
Europe targets an electro-powered economy
The European Commission’s vision is to make Europe the world’s first “electro-powered continent.” Rather than treating electrification solely as a climate policy, Brussels is positioning electricity as the foundation of economic resilience, industrial competitiveness, and strategic autonomy.
The headline objective is for electricity to account for 46% of final energy consumption by 2040. Achieving this target would fundamentally reshape Europe’s energy system by reducing natural gas demand by around two-thirds, halving oil consumption, and lowering annual fossil fuel imports by approximately €260 billion.
The plan is built around a straightforward principle: electrify every economically viable end use. Priority sectors include road transport, residential and commercial heating through heat pumps, and industrial processes where electric technologies can replace fossil fuel combustion. Delivering this transition will require continued deployment of renewable generation alongside major investment in transmission, distribution, energy storage, and digital grid infrastructure.
Independent modelling suggests that electrification, combined with continued improvements in energy efficiency, could reduce European gas consumption by around 70%, leaving natural gas with only a limited balancing role in the future energy system.
Making electricity the lowest-cost energy option
A defining feature of the EU strategy is its focus on affordability. Policymakers recognize that electrification will only accelerate if electricity becomes consistently more cost-competitive than fossil fuels.
The Commission therefore proposes narrowing the long-standing price gap between electricity and gas by reducing electricity taxes and levies, lowering network charges, and accelerating the deployment of smart meters across Member States.
Digitalization will play a central role. Smart meters can enable dynamic pricing, improve demand-side flexibility, and support the integration of distributed energy resources, including rooftop solar, battery storage, and electric vehicle charging infrastructure.
Canada prepares for a doubling of electricity demand
Canada’s National Electricity Strategy pursues many of the same objectives but places greater emphasis on expanding physical electricity infrastructure.
Federal projections indicate that electricity demand could double by 2050, driven by electrified transport, heat pumps, AI data centres, hydrogen production, critical minerals, and industrial decarbonization. To meet this demand, Ottawa estimates that more than CAD 1 trillion will be invested in generation, transmission, distribution, storage, and grid modernization by mid-century.
Rather than presenting electricity solely as a climate initiative, the government frames grid expansion as a national competitiveness strategy designed to attract investment, strengthen domestic manufacturing, and improve long-term affordability. Canada estimates that electrification could reduce total household energy costs for seven in ten households by 2050 while supporting more than 130,000 additional skilled workers across engineering, construction, operations, and grid management.
Unlike earlier regulatory proposals, the strategy also provides greater operational flexibility for existing natural gas generation, including support for carbon capture and recognized emissions offsets, while maintaining that most new generation capacity will come from hydropower, nuclear, wind, solar, and other non-emitting sources. The approach reflects a pragmatic balance between reliability, affordability, and decarbonization as electricity demand accelerates.
Transmission becomes strategic infrastructure
One of the strategy’s defining technical priorities is expanding Canadian interprovincial electricity transmission.
Canada’s provincial grids have historically developed as largely independent systems, with several provinces maintaining stronger connections to neighbouring U.S. states than to one another. Ottawa now plans to strengthen east-west and north-south electricity corridors through priority interties linking Alberta, British Columbia, Saskatchewan, Manitoba, Prince Edward Island, New Brunswick, and Yukon.
Greater grid integration offers significant technical and commercial benefits. Larger balancing areas improve renewable energy integration, reduce reserve requirements, enhance system resilience, and optimize the use of Canada’s extensive hydropower resources. Stronger interconnections also create opportunities to lower overall system costs while supporting industrial growth in resource-rich regions.
EU–Canada: Building a shared electrification future
The EU and Canada are well positioned to deepen cooperation as advanced economies pursuing large-scale electrification. Both are building cleaner, more resilient, digitally enabled electricity systems capable of supporting rising demand from electric mobility, hydrogen production, advanced manufacturing, AI infrastructure, and critical minerals processing.
Key areas for collaboration include grid digitalization, smart metering, long-distance transmission, energy storage, power system flexibility, and cybersecurity for critical electricity infrastructure. Canada brings strengths in hydropower and critical mineral supply chains, while Europe offers leadership in offshore wind, heat pumps, power electronics, grid integration, and electricity market design.
The two partners also share strategic interests in strengthening resilient supply chains for transformers, high‑voltage cables, batteries, semiconductors, and other essential grid equipment. Joint research, common standards, investment partnerships, and regulatory cooperation could accelerate deployment while enhancing the long‑term competitiveness of both the EU and Canada.
Together, these complementary strengths provide a strong foundation for a mutually beneficial partnership. By aligning standards, investment frameworks, and cleantech supply chains, the EU and Canada can transform parallel electrification strategies into shared opportunities for innovation, trade, energy security, and sustainable economic growth.