Ontario spending $285M on pre-development work for TC Energy’s 1000-MW pumped energy storage project

January 28, 2025 – The Ontario government announced it is spending up to $285 million to advance pre-development work for the proposed Ontario Pumped Storage Project, which would be developed by TC Energy (TCE) in partnership with the Saugeen Ojibway Nation, in the Municipality of Meaford.

The pre-development work includes the completion of a detailed cost estimate, and environmental assessments to determine the project’s feasibility.

The pumped storage (PS) facility would function by pumping water from Georgian Bay up to a reservoir during periods of low electricity demand, then release the water back into the bay to generate electricity during periods of high demand.

If developed, the facility would co-locate on the existing Canadian Army’s 4th Canadian Division Training Centre.

Project background

In December 2024, Minister of Energy and Electrification Stephen Lecce directed Ontario’s Independent Electricity System Operator (IESO) to:

“[…] make all reasonable efforts to, and take all necessary steps to, finalize and enter into a contract with TCE to enable TCE to recover eligible, prudently incurred expenses associated with the completion of pre-development work on the project […]”

However, IESO initially recommended that the province not proceed with the Meaford PS project (nor OPG/Northland Power Marmora PS project).

In a report to then-Minister of Energy Todd Smith (September 2023), IESO stated that, under currently proposed cost structures:

“[…] the [PS] projects do not compare favourably to currently available alternatives, including battery storage or a portfolio of other non-emitting resources, and therefore neither [PS] project is able to provide net benefits to Ontario’s electricity system or ratepayers.”

In January 2024, Minister Smith noted that IESO’s evaluation:

“[…] did not include a valuation of other broader societal and economic benefits from these projects. There are also potential value and risk mitigation opportunities provided by domestically sourced and constructed projects […]”

In response, TCE said that it and Saugeen Ojibway Nation would assist with the ministry’s evaluation of the project’s broader societal and economic benefits, and work to establish a potential long-term revenue framework for the project.

Next steps

The province will make a final decision on the project once a detailed cost estimate is complete.

The project also remains subject to the approval of TCE’s board of directors and Saugeen Ojibway Nation.

Should the PS project proceed, it would be the largest of its kind in Canada, providing up to 1000 MW of electricity storage.

TCE says it will be designed, engineered, and built by a domestic supply chain. It will create 1000 unionized jobs during construction, and over 75% of the total materials and supplies will be provided by Ontario-based companies.

It is expected that construction would begin in the latter part of this decade, and the project would be operational in the 2030s (subject to regulatory and corporate approvals).

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