Alberta’s Shift: Context for Energy Policy and Transition
Alberta’s government has announced plans to hold public consultations this fall on nuclear power as part of its broader energy strategy. Premier Danielle Smith emphasized that these consultations will be a key step in gauging public sentiment and informing future energy development decisions.
The province is seeking to reduce its dependency on natural gas, which is its primary source of power generation, particularly for remote industrial areas such as oil sands operations, which typically rely heavily on energy-intensive steam injection. Alberta’s oil sands sector has sparked interest in nuclear as a scalable, low-carbon power source. Nuclear power currently does not contribute to Alberta’s electricity grid, while it plays a prominent role in other areas of the country, such as Ontario.
Alberta’s Shift: Context for Energy Policy and Transition
The province is considering small modular reactors (SMRs), which are compact reactors ideal for on‑site power at oilsands or other industrial hubs in remote areas. They are also considering larger reactors, and a recent proposal may include building 2–4 reactors near Peace River, capable of delivering up to 4.8 GW of electricity. This would significantly boost capacity for heavy industry and potential AI data centres
Ontario provides a valuable blueprint for Alberta as it explores nuclear power, given its on nuclear for 60% of its electricity. Ontario’s leadership in deploying SMRs, demonstrates how early investment, streamlined regulation, and pairing nuclear with industrial demand (like AI data centres) can drive clean energy innovation and economic development.
While key specifics, such as the format of the consultations, the types of nuclear technologies under consideration, or whether construction is likely in the near future remain to be seen, the intent for consultations mark a next step in Alberta’s energy policymaking, inviting public input into nuclear power discussions after years of stalled proposals. Note that Alberta has long been at odds with the federal government over its Clean Electricity Regulations (CER), largely due to its heavy reliance on natural gas for electricity generation. To that end, exploring nuclear may potentially ease some tensions with the federal government on Alberta’s ability to meet the CER targets.
Introducing CCUS: New Frontiers in Carbon Management
In addition, on 4 July, 2025, Natural Resources Canada announced an investment of over CAD 21.5 million in five Alberta-based carbon capture, utilization, and storage (CCUS) demonstration projects, building on a broader federal commitment through 2027 aimed at maturing CCUS technologies as part of Canada’s clean energy strategy.
The CCUS projects aim to directly reduce emissions from hard-to-abate sectors, presenting as tools to lower carbon intensity without halting fossil fuel activity. Meanwhile, the anticipated public consultations on nuclear power suggest a future energy mix less reliant on fossil fuels to power industrial growth.
Next Steps and Impacts on Carbon Markets
These two developments underscore a broader energy approach and carry potential implications for the Technology Innovation and Emissions Reduction (TIER) system, the province’s industrial carbon pricing program. Both nuclear and CCUS can lower emissions from Alberta’s industrial and power sectors, nuclear by reducing the carbon intensity of the power grid, and CCUS by reducing on-site emissions, which in turn could reduce compliance obligations or generate credits under the program.
The TIER market is currently structurally oversupplied, compounded by political uncertainty with regard to the upcoming 2026 benchmark review, which will strengthen and refine industrial carbon pricing systems across Canada. This review may counterbalance the potential market impacts from developing CCUS and nuclear power by tightening stringency levels, realigning supply and demand in the market. However, details of this review remain uncertain at the time of writing.
ClearBlue will continue to monitor these developments and will provide ongoing updates as needed.