No Economic Value

The project’s exorbitant price tag is major cause for concern. Despite findings from Ontario’s Independent Electricity System Operator (IESO) that the project does not economically compare favorably to existing non-emitting resources, Energy Minister Todd Smith is determined to push it forward, burdening Ontarians with significant financial and environmental costs.

The price tag on this risky megaproject has already skyrocketed from $2.2 billion in 2019 to $4.5 billion last year, and TC Energy has now agreed to cap it at $7 billion. If the Ontario government hands the company the long-term electricity contract it seeks, all provincial electricity ratepayers will be on the hook for underwriting the costs of this possible white elephant for years to come.

In addition, Energy Minister Todd Smith has agreed Ontario taxpayers will pick up TCE’s pre-construction expenses, despite the fact that the project was neither solicited nor subject to a public competition. In his instructions to the IESO, the minister suggested TC Energy could apply for assistance in recouping those outlays from the federal government, meaning all Canadian taxpayers could end up footing that part of the bill.

Utility Bill

What Are the Alternatives?

The IESO and MoE have determined that Ontario needs pumped electricity storage for a variety of reasons, including assisting the development of green energy, such as wind-power and solar, and reducing dependence on natural gas power to meet high demand periods. Save Georgian Bay fully appreciates the need for increased renewable electricity supply and storage in Ontario to meet growing needs. We support efforts to take urgent action against climate change, including decarbonizing the grid, and recognize the role that electricity storage plays in that process. But we do not believe this project provides a rational or viable solution. There are numerous newer and more efficient technologies that are far less environmentally damaging and expensive that can be built in much shorter time. We urge governments at every level to examine and adopt more efficient and cost-effective storage solutions that do not exact such negative tolls on the environment and priceless natural landscape. It is essential to balance the need for sustainable energy solutions with the preservation and stewardship of our natural environment for generations to come.

Oneida battery storage

Eight 250 MW battery storage projects are underway in Ontario, one of which (Oneida – Canadian Battery Energy Storage) is under construction and due to be completed by 2025. The other seven were sent out for tender in 2023.

This alternative to pumped storage has the advantage of a much shorter construction period and is ~87% efficient, vs pumped storage at ~67% efficient.

Pumped storage is designed to last around 50 years, and, with a major refurbishment, can last as long as 100 years. On the other hand, the batteries in battery storage projects slowly deteriorate over time and would have to be replaced every 20 years. That may change as battery technology develops. Batteries are steadily getting cheaper, whereas, according to TCE, the project’s estimated cost has gone from $4.5 to $7 billion, and experienced SGB engineers believe that a cost of $8-10 billion is more likely. These estimates mean that the capital cost for building pumped storage would be roughly double the capital cost for an equivalent battery storage.

One of the key questions relates to the shifting demand for electricity at current off-peak times. As electric vehicle usage grows, together with other off-peak energy demands, the need for energy storage is expected to steadily diminish. What will the demand profile and the need for energy storage look like when the project is completed in 2032/33?