Canada may be approaching a turning point in its energy transition, as new analysis highlights geothermal energy’s potential to become a reliable source of clean baseload power across the country.
A recent report from RBC’s Climate Action Institute identifies geothermal as an underdeveloped but increasingly viable component of Canada’s future electricity system. While Canada is globally recognized for hydroelectric resources and energy exports, geothermal has remained largely untapped despite favourable geology and deep subsurface expertise developed through decades of oil and gas activity.
The report emphasizes two technologies driving renewed momentum: enhanced geothermal systems (EGS) and closed-loop geothermal systems. Both approaches apply advanced drilling and subsurface engineering techniques to access heat stored in deep rock formations, enabling geothermal deployment beyond traditional volcanic regions.
Recent technological advances are improving project economics. Innovations such as high-performance drill bits and real-time fibre-optic monitoring are reducing well costs and improving operational certainty, helping geothermal move closer to commercial competitiveness. In high-temperature regions including British Columbia’s Mount Meager area and northern basins, projected electricity costs could fall to approximately CAD $45–53 per megawatt-hour — comparable to combined-cycle natural gas generation.
For Canada, the implications extend beyond clean energy supply. Geothermal offers a rare combination of attributes increasingly needed by modern power systems: continuous generation, low emissions, and domestic energy security. Unlike intermittent renewables, geothermal operates independently of weather conditions, providing firm electricity capable of supporting grid stability and emerging high-demand sectors such as data centres, electrified industry, and northern community energy systems.
Canada’s subsurface advantage is particularly significant. Western sedimentary basins and Precambrian basement formations contain temperatures suitable for both electricity generation and direct-use heating applications. Several pilot and proposed projects across Alberta, British Columbia, and Saskatchewan are already exploring how geothermal can deliver power, district heating, and industrial energy solutions simultaneously.
Despite this potential, geothermal deployment in Canada remains at an early stage, with only limited commercial electricity generation currently operating. Industry observers suggest that regulatory clarity, investment alignment, and early demonstration success will be key to accelerating adoption and unlocking private capital participation.
The RBC analysis positions geothermal not as a replacement for Canada’s existing energy strengths, but as a complementary addition — one capable of leveraging the country’s drilling workforce, infrastructure expertise, and geological resources to deliver long-duration clean power.
As electricity demand grows and energy systems evolve, geothermal may represent one of Canada’s most strategic opportunities: transforming deep subsurface heat into dependable infrastructure that supports economic growth, energy resilience, and long-term decarbonization.
