Canada’s intertie projects depend on hydro reservoirs and critical minerals
by Jonathan Miles · Open Access GovernmentIn this detailed analysis, Prof. Dr. Cecilia Van Cauwenberghe explains that Canada’s intertie projects rely on hydro reservoirs and critical minerals
Canada’s grid plans and its critical minerals base depend on each other
In June 2026, after the Energy and Mines Ministers’ Conference, the Government of Canada announced from Yellowknife that ministers supported a Federal-Provincial-Territorial Framework on intertie projects, which will develop a standard cost allocation mechanism to guide and arbitrate costs among project participants. It named five transmission projects for priority support:
An approximately 800 km high-voltage direct current line linking Yukon to British Columbia to support Yukon’s industrial development, including the critical minerals sector; restored capability on the Alberta-British Columbia intertie, adding about 150 MW; an upgraded Alberta-Saskatchewan intertie whose McNeill converter station near Medicine Hat will be replaced, adding about 250 MW; a scalable Saskatchewan-Manitoba intertie that could add up to 2 GW; and new subsea cables between Prince Edward Island and New Brunswick. Canada expects electricity demand to double by 2050, and about 80% of its generation is non-emitting.
The Yukon line ties the plan to critical minerals by name, and the water in Canada’s hydro reservoirs shapes how much power its interties carry.
As the Honourable Tim Hodgson Minister of Energy and Natural Resources, put it: “It’s simple: intertie projects build Canada Strong. Our government has moved assertively to build one economy out of thirteen and give ourselves more than anyone else can take away, and the electricity grid is an obvious next step. By working together, we can ensure every Canadian from coast to coast to coast can rely on secure, homegrown electricity to support our national security, economic growth and a sustainable, affordable future.” (1)
Dry years expose how much Canada’s hydro depends on interties
Hydroelectricity generated 60% of the 625.7 TWh Canada produced in 2021. (2) WaterPower Canada told the House of Commons Natural Resources Committee that hydro
offers three benefits: Months of storage where reservoirs exist, output that can be raised or lowered as needed, and firm output from stored water, and that interconnecting hydro regions with their neighbours extends the reach of that storage. (3) Hydropower accounted for 94% of the 212.9 TWh Quebec generated in 2021, 15 interconnections link Quebec’s system with its neighbours, and the province is typically Canada’s largest electricity exporter, although in 2023 its exports decreased because of low water levels in its reservoirs. (4) With precipitation abnormally low across Canada for two years, Quebec exported 13.3 TWh in 2023 against 25.9 TWh in 2019, and British Columbia imported 16.8 TWh against 11.2 TWh in 2019, ending 2023 as a net importer of 10.2 TWh from the United States. (5) In those dry years, Quebec’s exports fell by about half while British Columbia drew on United States imports across its interties, which the analysis reads as intertie capacity acting as a buffer against drought.
Midstream refining leads the constraints on Canada’s battery minerals
Canadian mines produced 514,582 metric tons of copper in concentrate in 2024, up 6.2% from 2023 and 26.2% below 2015, and Canada ranked 12th worldwide with 2% of global mined copper. (6) Natural Resources Canada expects the green energy transition to increase copper demand because of copper’s critical applications in expanding electricity networks and clean energy technologies, and the country has one primary copper smelter and refinery in Quebec, with two sites in Ontario and Newfoundland and Labrador producing limited amounts of refined copper. (6)
Canada ranked fourth in global nickel production in 2024, with 125,364 metric tons in concentrate. Batteries took 15% of global nickel use in 2024, a growing use. Canada has three key nickel refineries in Fort Saskatchewan, Sudbury, and Long Harbour, and Electra Battery Materials is developing a cobalt and nickel sulfate production facility. (7)
A 2026 assessment of six critical raw materials for electric vehicle batteries in Canada, run across three adoption scenarios to 2050, found that graphite, copper, and nickel dominate cumulative demand, that copper and nickel represent relative strengths while lithium, graphite, and manganese reveal more pronounced vulnerabilities, and that cobalt demand exceeds known Canadian reserves under the Government of Canada scenario; the authors locate the main constraint in the misalignment between rapid electrification targets and uneven system capacity, especially limited midstream refining. (8) Read together, the copper and nickel data above and the assessment, which rates copper a relative strength yet lists limited midstream refining first among system constraints, lead the analysis to refining as the step where new plants would supply the refined copper that grid equipment needs, and Electra’s sulfate facility marks the same step for nickel.
Quebec’s battery materials fit the chemistry leading grid storage
Quebec is Canada’s leading producer of graphite, lithium, and high-purity iron, hosts more than 50% of Canada’s lithium projects, has phosphate mining projects under way, and is developing lithium, graphite, apatite, and nickel processing. (9) Lithium, iron, and phosphate are the constituents named in Lithium Iron Phosphate (LFP) batteries, and Quebec produces lithium and high-purity iron and is developing phosphate.
On this analysis, Quebec’s lithium and graphite processing projects could address two of the vulnerabilities identified above. In 2025, 108 GW of new battery storage capacity was deployed worldwide, and LFP batteries now account for around 90% of deployments, against a share well below 50% five years ago; they are typically cheaper and better suited to more frequent cycling, although less energy-dense than rival chemistries commonly used in electric vehicles. (10) The analysis suggests that this match opens a grid market for Quebec’s battery materials alongside the vehicle market, once their output meets battery-grade specifications.
Interties and refineries belong in one Canadian investment plan
The intertie Framework the ministers supported in June will develop a standard cost allocation mechanism, and the evidence supports writing midstream mineral processing into the same plan, since the Yukon line already ties transmission to the critical minerals sector and copper demand is expected to grow with electricity networks. For utilities and technology developers, the analysis suggests that the grid work ahead includes converter replacement such as the McNeill station and intertie import capacity sized for consecutive dry years, given the British Columbia import rise shown above.
For mining and metallurgy teams, the gap is the midstream refining capacity identified above as limited. For battery manufacturers and materials developers, Quebec’s lithium and high-purity iron production and phosphate projects offer a regional base for the chemistry that leads grid storage, and for investors and equipment suppliers the analysis supports treating transmission and processing as one capital program for a grid expected to carry double today’s demand by 2050.
References
- Natural Resources Canada. ‘Canada Takes Action to Advance a Stronger Grid
and Increase Reliable, Affordable Energy’. News release, June 26, 2026. https://www.canada.ca/en/natural-resources-canada/news/2026/06/canada-takes-action-to-advance-a-stronger-grid-and-increase-reliable-affordable-energy.html - Canada Energy Regulator. ‘Provincial and Territorial Energy’ Canada Energy
Profile’. Accessed October 2026. https://www.cer-rec.gc.ca/en/data-analysis/
energy-markets/provincial-territorial-energy-profiles/provincial-territorial-energyprofiles-canada.html - House of Commons of Canada, ‘Standing Committee on Natural Resources’.
Evidence, Meeting No. 100 (testimony of Gilbert Bennett, WaterPower Canada).
June 10, 2024. https://www.noscommunes.ca/documentviewer/en/44-1/RNNR/meeting-100/evidence - Canada Energy Regulator. ‘Quebec Energy Profile Provincial and Territorial
Energy’ Quebec’. Last modified March 26, 2026. https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/province-territory-energy-profiles/quebec.html - Canada Energy Regulator. ‘Market Snapshot: Electricity Trade Trends Affected
by Recent Low Precipitation’. March 23, 2026. https://cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2024/market-snapshot-electricity-trade-trends-affected-by-recent-low-precipitation.html - Natural Resources Canada. ‘Copper Facts’. Minerals and Metals Facts, last
updated January 5, 2026. https://natural-resources.canada.ca/minerals-mining/
mining-data-statistics-analysis/minerals-metals-facts/copper-facts - Natural Resources Canada. ‘Nickel Facts’. Minerals and Metals Facts, last
updated January 5, 2026. https://natural-resources.canada.ca/minerals-mining/
mining-data-statistics-analysis/minerals-metals-facts/nickel-facts - Ottoni, M., Helbig, C., Habib, K. ‘Aspiration versus Capacity: The Case of Critical
Raw Materials for Electromobility in Canada’. Resources Policy, Vol. 119, Article
105962, 2026. https://doi.org/10.1016/j.resourpol.2026.105962 - Gouvernement du Québec. ‘Investing in the Mining Sector’. Last updated June
8, 2026. https://www.quebec.ca/en/agriculture-environment-and-naturalresources/mining/investing
10. International Energy Agency. ‘Global Energy Review 2026: Battery Storage’.
IEA, Paris, 2026. https://www.iea.org/reports/global-energy-review-2026/
technology-battery-storage