TC Energy announced it will continue to advance the 1 GW Ontario Pumped Storage Project in Canada and begin work with the Ministry of Energy and Ontario Energy Board to establish a potential long-term revenue framework for the project.
Further, TC Energy and prospective partner Saugeen Ojibway Nation will assist with the ministry’s evaluation of the project’s broader societal and economic benefits.
This decision comes after direction from the minister to the Independent Electricity System Operator (IESO) outlining next steps related to the project, including a cost recovery agreement. Subject to an agreement with the IESO, this direction from the minister will facilitate the continued development of the project.
The Ontario Pumped Storage project is proposed for construction on the Department of National Defence’s 4th Canadian Division Training Centre in Meaford, in the territory of the Saugeen Ojibway Nation. The project would store enough clean electricity to power 1 million homes for 11 hours. It would generate about $12.1 billion in energy system cost benefits while creating more than 1,000 direct jobs regionally and in Ontario. The project represents a made-in-Ontario solution – it will be designed, engineered and built by a domestic supply chain, TC Energy said. Over 75% of the total materials and supplies will be provided by Ontario-based companies. Once operational, the project would pay about $8.5 million annually in income to workers employed at the facility, off-site employees and direct contract workers.
“The Minister’s direction to advance this project is a strong signal that the work TC Energy and Saugeen Ojibway Nation are doing is important. It recognizes the critical role that pumped hydro storage will have in enhancing the diversity of Ontario’s supply mix and achieving a net-zero electricity grid,” said Annesley Wallace, executive vice president, Strategy and Corporate Development and president, Power and Energy Solutions, TC Energy.
TC Energy said it will begin immediate work with the ministry and the OEB to establish a potential long-term revenue framework for the project, culminating in a report to the minister by July 31, 2024. Further, TC Energy will provide a report to the ministry with a breakdown of estimated development costs and schedule. After submission of these items, the ministry will provide a recommendation to proceed with pre-development work within 45 days.
Following this, TC Energy would begin negotiation of a cost recovery agreement with IESO to recover eligible, prudently incurred expenses associated with pre-development work. A follow-up report is to be provided to the ministry by the IESO within 60 days of submission of the estimates.
The project remains subject to the approval of TC Energy’s board of directors and Saugeen Ojibway Nation. It is expected that construction would begin in the latter part of this decade, with the project entering service in the early 2030s, subject to receipt of regulatory and corporate approvals. Further, any future capital allocation decisions will align with TC Energy’s net capital expenditure limit of $6 billion to $7 billion post-2024.
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