I am replying to Anne Boody Horwood’s letter, published January 25, 2024. Ms. Boody Horwood touches on a number of points, and we offer the following considerations in response.
I would like to start by saying that the Ontario Pumped Storage Project (Project) will need to demonstrate that it is cost effective before it moves forward. To ensure that it is, the Minister of Energy has asked for more information. This direction was recently outlined in a January 9 letter from the Minister of Energy to the Independent Electricity System Operator (IESO). For those interested, I would encourage readers to review the letter in full at: https://www.ieso.ca/en/Corporate-IESO/Ministerial-Directives.
In particular, the Minister is seeking a more refined capital cost estimate, including completion of a Class 3 Project estimate – this is not an unusual ask given the very early stage we are at with regards to project development. Further, as noted in the Minister’s letter, IESO’s assessment did not include a valuation of the broader societal and economic benefits that may be attributable to the Project. In order to ensure a balanced evaluation of the Project, Minister Smith has directed his staff to work with us and other ministries, to assess the broader societal and economic benefits of the Project.
The Project represents a truly made-in-Ontario solution – it will be designed, engineered, and built largely by Ontario labour and resources. By relying on Ontario’s domestic construction and hydro industries to advance the Project, we are not dependent on foreign global supply chains. This benefit was acknowledged in Minister Smith’s letter, in which he noted the potential value and risk mitigation opportunities that are realized when energy storage projects are domestically sourced and constructed.
Ontario needs a portfolio of diverse storage technologies to ensure a secure, reliable and sustainable electricity grid. If the province was to rely exclusively on lithium-ion batteries for our storage needs, we would collectively be supporting and investing in foreign jobs and manufacturing – China for example possesses the vast majority (~75 per cent) of the global supply chain for lithium-ion battery technology. Conversely, if we look to our Project – we would be investing in 1,000+ Canadian jobs and materials. In fact, over 75 per cent of the total labour, materials and supplies will be provided by Ontario-based companies. We are committed to hiring and buying local to create well-paying jobs and increase spending in the province.
We have heard from project opponents that battery storage technology is more cost effective and more efficient. Batteries will have an important role in Ontario’s electricity system, however when it comes to long duration energy storage at scale, pumped hydro storage is an optimal solution. The cost and environmental footprint to replicate our Project using batteries would be significantly higher when the overall lifecycle impact is contemplated (mining, manufacturing, installation, replacement, and disposal). Further, batteries do not offer the large volume of power that pumped storage can provide – for comparison, the largest lithium-ion battery in the world is 300 megawatts and has four-hours of storage capacity. The Ontario Pumped Storage Project is 1,000 megawatts, storing enough clean electricity to power one million homes for 11 hours.
With continued economic growth and electrification in the province, the IESO anticipates that Ontario’s demand for electricity could more than double by 2050. In order to ensure that the province has a reliable, safe and clean energy system, we need to take action now. It’s our view that the Project will help address upcoming electricity needs and make better use of the electricity generation that Ontarians have already paid for.
We know safety is a top priority for both citizens of Meaford as well as TC Energy. You have our commitment that this Project will be designed, maintained and operated, to keep everyone safe. What we are proposing is not without precedent – in Niagara, there are two pumped storage facilities with reservoirs that have operated safely for decades. The Sir Adam Beck Pump Generating Station on the Ontario side is an example of a pumped hydro project where the reservoir sits 50 meters from the nearest residential home. The community of Queenston, Ontario, lies directly below. The reservoir is twice the area of what we are proposing (750 acres versus 375 acres) and has been operating safely since 1957. Within a few kilometers of the Sir Adam Beck Pump Generating Station is the Lewiston Pump Generating Plant on the United States side. The community of Lewiston, New York, lies directly below the reservoir and likewise the facility has operated safely since the early 1960s.
I want to thank you and your readers for your ongoing interest in our Project. We continue to host coffee chats every Thursday at our Sykes Street office and welcome the opportunity to speak to anyone who may have questions. More information is available at: www.poweredbymeaford.com/events.
John Mikkelsen, P.Eng. M.A.Sc.