Proposed by TC Energy in partnership with the Saugeen Ojibway Nation—representing the Saugeen First Nation and the Chippewas of Nawash Unceded First Nation—the Ontario Pumped Storage Project (OPS) would pump water from Georgian Bay at night, when electricity is cheaper, into a 20-million-cubic-metre reservoir 150 metres above the shoreline, then release it to generate hydroelectricity at times of higher demand.
In late January, the Ministry of Energy and Electrification announced $285 million in funding for pre-development work, including the completion of detailed cost estimates and environmental assessments to determine the proposal’s feasibility. Initial reports that the pre-development funds would be paid out to the project proponent have been raising flags with veteran energy watchers in Ontario for some months.
The province did not disclose how the funds will be distributed, but the Saugeen Ojibway Nation Joint Chiefs welcomed the announcement in a letter. “Our pre-development work will include environmental studies to further our knowledge of the site impact and design of the proposed project,” they wrote. “Our work has largely been on hold throughout 2024 due to funding limitations.”
“With the $285 million commitment we are able to resume studies,” the letter continued. “We have already carried out extensive investigations on the project and have made important changes to the design to make sure it is a gold standard project.”
With studies and assessments in hand, Ontario will make a final decision on the project. TC Energy says the proposal hinges on the support of the the Saugeen Ojibway, which would have the option to enter an equity partnership if it moves forward. If approved, construction could begin later this decade, with operations starting in the early 2030s, writes the Owen Sound Sun Times.
Provincial Funding Committed
Former energy minister Todd Smith was expected to approve OPS toward the end of 2023. But in a January 9, 2024 Ministerial Directive he withheld a final decision, citing previous analysis that pumped storage projects did not compare favourably to alternatives like battery energy storage systems (BESS). However, that earlier analysis had not included social and economic benefits, Smith said.
Smith asked TC Energy and Saugeen to report back with the estimated costs of pre-development work. He also asked TC Energy to engage with the federal government on “additional assistance,” writing that his cabinet colleagues would expect “significant federal involvement” toward sharing those pre-development costs.
Representatives of the ministry, the provincial Independent Electricity System Operator (IESO), and TC Energy did not clarify to The Energy Mix whether that report had been filed. For this and other questions, TC Energy did not reply to requests for comment, while the Ministry and IESO directed The Mix to a recent statement and did not respond to follow-up emails.
Smith was replaced as energy minister by Stephen Lecce in August. This past December, Lecce directed the IESO to enter a cost recovery agreement with TC Energy so the company could recover “prudently incurred expenses” associated with the pre-development work—work that would give the government “a more informed view” before its decision.
In a past announcement to similarly fund pre-development work for an Ontario-based energy project, $50 million awarded to the Bruce Power nuclear project was provided entirely by Natural Resources Canada.
Comparison to Battery Storage Systems
In April 2024, a second assessment [pdf] tied the project’s economic and social benefits to job creation. It compared OPS to an alternative scenario where BESS replaced pumped storage. This comparison aimed to address cost concerns raised by Smith and local advocacy group Save Georgian Bay, which argues that BESS is a cheaper, more efficient option that would avoid harm to the Georgian Bay ecosystem.
But experts suggest the two technologies cannot be compared strictly on their economics. The diversity of options give communities, utilities, and system operators opportunity to find the technology that best fits the specific needs of a region or grid.
“There is no one size fits all storage solution,” Justin Rangooni, president and CEO of Energy Storage Canada, told The Mix.
The Ministry says BESS is critical for responding quickly to short-term demand, while OPS would fill a gap with long-term storage capable of providing “up to 1,000 megawatts of clean, affordable, and reliable electricity storage”, enough able to power one million average Ontario homes for up to 11 hours.
The assessment frames concludes that the Meaford project also offers greater job creation and social benefits because its supply chains are domestic, while BESS systems rely on international outsourcing. For this reason, opting for an equivalent BESS investment would provide $3.2 billion lower GDP gains, 24,000 fewer jobs, and 63% lower tax revenues. In comparison, the net benefit of pursuing OPS would be equivalent to $3.5 billion, the assessment finds.
But those numbers are based on existing supply chains. A 2024 brief by the Canadian Renewable Energy Association—about protecting Canadian manufacturing from competition with China—found that while Canada had no domestic supplier of BESS components, that problem could be addressed. Indeed, Natural Resource Canada’s Advanced Clean Energy Program aims to do just that with further research, and by augmenting domestic materials sourcing and battery recycling.
“Both pumped hydro and BESS offer substantial opportunities for domestic supply chains in Canada,” said Rangooni. Pumped storage can use domestic supply chains for materials like concrete and steel, he explained, while BESS supports investments in domestic manufacturing and creates the potential for supply chain investment within Canada.
Years of Public Engagement
The project was publicly announced to Meaford residents in late 2019 and has since been a divisive issue for the municipality. TC Energy has so far commissioned a regional economic study [pdf] and a report on the project’s value [pdf], both released in 2020.
Meanwhile, groups like Save Georgian Bay have raised concerns about the project’s impacts on the environment and nearby communities. The group points to possible impacts on local fish populations, dangers from unexploded munitions and toxic waste due to its proximity to a military base, and damage to the Niagara Escarpment. TC Energy says those impacts can be addressed.
So far, the project has not undergone the required assessment to resolve those disagreements.
In early 2023, a 5-2 vote by Meaford City Council conditionally approved the project following a meeting of “intense drama,” reported the Owen Sound Sun Times. But since the project would be sited on federal land owned by the Department of National Defence, it only needs to be okayed by the provincial and federal governments—not local municipalities.
Councillor Rob Uhrig explained after the council debate that the vote was meant “for regulatory and negotiating control,” as council lacked authority to grant approval.
Mayor Ross Kentner said he was concerned the project would proceed “no matter what we did”—but after TC Energy’s initial “ham-handed approach,” he has been impressed by their improvements for the project and community relations.
Nearby Owen Sound also voted to conditionally support the project, while four other municipalities in the vicinity remain opposed. Grey County Council, which represents nine municipalities in the area, has also passed a motion of support.
The approving votes followed an ambitious campaign undertaken by TC Energy to engage with the community and build grassroots support. Last summer, The Narwhal wrote that a leaked recording suggested the campaign mirrored past strategies—used by TC Energy for getting project approvals elsewhere—including what speakers on the recording referred to as “base tactics” like casually meeting politicians and bureaucrats, shaping media stories, “leveraging” relationships with Canadian diplomats, and using Indigenous leaders as “validators” to sway politicians.
Responding to the recording, Chippewas of Nawash Unceded First Nation’s Chief Greg Nadjiwon told The Narwhal those tactics are “a corporate game” that reflects “old-school thinking,” adding that he would walk even more carefully in the relationship with TC Energy.
The company said community engagement is integral to operations that “need to earn the support and trust of local people and local communities.”
The Saugeen Ojibway Nation did not reply to a request for comment, but said in the letter that its decision will rest on assessments that emerge from the pre-development work
