The Ontario government pushed forward TC Energy’s proposal to build a large pumped storage project on Georgian Bay, despite early expert advice it would be costly and not meet the province’s current energy needs.
That advice was shared by the provincial Crown corporation responsible for the supply and demand of energy, the Independent Electricity System Operator, in an August 2021 memo obtained via freedom of information laws and shared with The Narwhal.
In it, the operator provides a preliminary review of TC Energy’s proposal to build a 30-metre-deep, nearly 152-hectare reservoir at the top of the Niagara Escarpment in Meaford, Ont. The reservoir would hold water pumped up from Georgian Bay and then release it back through a pipe with turbines to store and generate electricity.
TC Energy’s pumped storage project would pump water from Georgian Bay to store in a reservoir on the Niagara Escarpment. Then it will release the water back to the bay through a pipe with turbines to generate electricity. Map: Shawn Parkinson / The Narwhal
The system operator’s 2021 preliminary review is the first step in a three-stage screening process established by Ontario’s Ministry of Energy. If an energy project makes it past this stage, it is reviewed again by the ministry and the system operator, and then receives final approval by the government.
In its review, the system operator considers the potential for the project to supply energy to the grid when it’s needed and the cost for ratepayers — that is, anyone who pays an electricity bill. In the memo, the operator told the government that, given TC Energy’s “long development timeline” that would see operations start in 2028, the project “is not expected to contribute to meeting Ontario’s short- or medium-term system needs,” which are immense.
TC Energy has repeatedly said the project will not be built before it meets all provincial and federal requirements, based on its environmental, social and economic impact. As has been the case since June 2024, the Ontario Ministry of Energy did not respond to emailed questions from The Narwhal.
Despite early advice that the project may not be in the best interest of electricity customers in Ontario, the provincial government committed up to $285 million to further TC Energy’s pumped storage proposal. In recent months, that work included drilling into the lakebed for environmental studies. Photo: Carlos Osorio / The Narwhal
With Ontario staring down a massive energy supply crunch due to electrification, the rise of data centres and the temporary shutdown of major nuclear facilities for repairs, the government instructed the operator in February 2021 to develop a screening process for unsolicited energy projects that could help bridge that gap.
That meant anyone could pitch a “unique or innovative” energy project to increase the supply of energy. To make it through the process, a project had to be “sufficiently developed, able to demonstrate community support and reduce electricity system and ratepayer costs.”
TC Energy’s proposal was considered in this new bucket. But in the August 2021 memo, the system operator seemed wary. It noted that while there are value-added benefits for “long-lived capital intensive projects” like this one, it felt that these should be considered in a competitive procurement process designed “to acquire these types of resources” — meaning the Georgian Bay proposal should be evaluated among other projects of similar scale and output.
The operator also noted the project carries several significant risks, including “cost overruns and delays,” as well as the need for “significant permitting and approvals” from the federal and provincial governments.
TC Energy’s proposed project requires major construction on the protected escarpment, as well as installing the water pipeline in the bay. Most of the project will be built on Department of National Defence lands, which are covered in an unknown amount of unexploded ammunition that has collected over the last seven decades; the company has previously said it will clean up the area before proceeding.
Details about these risks are redacted in the memo as they are deemed advice to government, third party information and sensitive economic information.
The province was expected to greenlight the Meaford project, along with another pumped storage proposal in Marmora, Ont., in late 2023 as part of the government’s broad support for energy storage solutions. Instead, in January 2024, then-energy minister Todd Smith delayed his response to the operator and urged TC Energy to seek federal funding to mitigate its cost projections, recognizing concerns flagged by the Independent Electricity System Operator.
If built, TC Energy’s pumped storage energy project will be located on land owned by the Department of National Defence. The 80-square-kilometre property on the shore of Georgian Bay was established as a military training facility during the Second World War, but its use has dwindled in recent years. Photo: Christopher Katsarov Luna / The Narwhal
The province also committed up to $285 million of taxpayer money for TC Energy to conduct pre-development studies, including an offshore drilling program that is currently in progress.
In its press release about the funding, the province said this money would help the company “complete a detailed cost estimate and environmental assessments to determine the feasibility of the proposed project.”
“The province will make a final decision on the project once a detailed cost estimate is complete, ensuring the project is built only when it is in the best interest of Ontario ratepayers,” the press release said.
Sara Beasley, a spokesperson for TC Energy, told The Narwhal this investment would help the company “provide a more accurate estimate of the cost of the project.”
“The project will need to demonstrate that it is cost-effective and is in the best interest of Ontarians before it moves forward,” Beasley said.
In an email, Michael Dodsworth, a spokesperson for the operator (who was recently a spokesperson for the Ontario Energy Ministry), told The Narwhal it has entered a contract “that enables Trans Canada Energy to recover eligible, prudently incurred expenses associated with pre-development work on the proposed Ontario Pumped Storage Project in Meaford.”
“The purpose of this pre-development work is to evaluate future project potential,” he said.
