TC Energy Pumped Storage

I have edited the content of this article as I have learned more about the project and developed my perspective. Current as of September 22, 2022.

Introduction

Before starting I want to state:

1. Meaford Municipal Council is not in a position of authority to make a decision on whether this project moves forward. These decisions are with the Provincial and Federal governments and their agencies.
2. Meaford Municipal Council is still responsible for advocating on behalf of their ratepayers. If the ratepayers want council to take a stand, they are obligated to. However, ratepayers (Meaford or otherwise) should also reach out to their MPPs and MPs.
3. I am personally against this project.

Project Summary:

TC Energy (TCE) wants to build an open loop system Hydroelectric Pumped Storage Plant (PSP) on the federally owned shoreline of the Department of National Defence (DND) Training Centre in Meaford. This proposed facility has serious and potentially harmful implications for local communities, the environment, and Georgian Bay’s aquatic ecosystem. The quoted costs in 2020 were approximately $4billion, to be invested by the government and not by TCE. The rationale for this is that it is a public infrastructure project that TCE will build and operate for the government. The government will pay to build it and TCE will keep the profits of operating the facility.

TCE states that this project will use 1400 MW of surplus “off-peak” electricity at night to pump water from Georgian Bay into a reservoir that they will build on the Canadian 4th Division Training site north of Meaford. During the day, the water will be released back to the bay, generating 1000 MW of power. Essentially, this facility functions as a battery that is 70% efficient. These losses, which are acknowledged by TCE, come from frictional losses within the machinery and piping. However, TCE does not acknowledge transmission losses, which would be incurred in the transmission of the released electricity from Meaford to the Stayner distribution site and into Ontario’s grid. These losses are the reason you can’t run household extension cords long distances, and are a major factor in designing grid transmission lines. As of September 19, I am still working on what losses we can expect from this project.

My Rationale

In the 2 years since I first learned about this project, I was unsure about whether I was for or against it. After many conversations with concerned neighbours and other community members I was leaning towards saying, “No” but had not heard a good argument about whether this project was essential for ensuring stability and quality within Ontario’s electricity system. I sought out engineers with relevant backgrounds, and none of them could either.

Surplus Energy

Ontario has surplus energy at off-peak hours because almost 60% of Ontario’s electricity is generated from nuclear sources (Power Data (ieso.ca)) [note: almost half of that comes from Bruce Power and TCE owns ~48% of Bruce Power (TC Energy — Bruce Power)]. Nuclear energy cannot be turned on or off or scaled up or down like other sources can, meaning that we end up with surplus. At present, this surplus energy is mostly sold to other jurisdictions (mostly American) at or slightly below cost, or is wasted into the ground. This is a regrettable loss.

TCE argues that this project, which will take almost 10 years to build, will allow us to recapture and use some of this surplus energy. Personally, I do not mind giving it to the Americans because it prevents them from burning coal.

The problem is that in 10 years, we will not have surplus energy like we do today. With the number of electric cars charging at night increasing, the switch to electric climate control, and overall electrification, this surplus will dwindle. Further, the Pickering nuclear generation facility is scheduled to close 3 years from now in 2025, meaning that there will no longer be a surplus and we will need to import energy. Despite this, TCE will hold a contract that allows them to continue wasting 400MW of power for their own profit.

TCE’s Profit and Economics

Off-peak electricity price is $0.082/kwh and on-peak is $0.17/kwh (Sep 2022)
1MW = 1000 KW.
The facility will take 11 hours and 1400MW to fill and 8 hours to release 1000MW.
FILL: 1,400 * 1,000 = 1,400,000kwh. RELEASE: 1,000 * 1,000 = 1,000,000kwh.
FILL$: 1,400,000kwh * $0.082 * 11hr = $1,282,800
RELEASE$: 1,000,000kwh * $0.17 * 8hr = $1,360,000

Daily Profit: $1,360,000 – $1,282,800 = $77,280
Yearly Profit: $77,280 * 365 days = $28,270,000

Outlay value achieved in: $4,000,000,000 / $28,270,000 = ~141.5 years

Therefore, when the facility is operational, TCE will buy $1,282,800 of electricity every night. In the evening, TCE will sell $1,360,000, profiting $77,280 daily and $28,207,000 yearly. If TCE scored a typical contract, it would mean that they are contractually entitled to operate and earn their profits no matter what Ontario’s electricity situation is, securing their profits for their shareholders while holding the Grid ransom.

We should also consider that their profit margins will higher that I have calculated because they are buying a portion of their power from themselves (TCE owns 48% of Bruce Power, which produces 30% of Ontario’s electricity = ~15% back to themselves), at this rate they would make back the $4,000,000 required to build this facility in 141.5 years. This value proposition is absurd.

This will never return the value back to us, the tax payers who are funding this, because the project will only last up to 75 years. To make it worse, the $4B guestimate TCE gave before the pandemic is far out of date. COVID-19 inflation has sent fuel prices, labour costs, housing, materials, and everything else through the roof. I bet the cost will double.

The IESO (Independent Electricity System Operator) is the Ontario government corporation that is responsible for managing the Ontario electricity system and negotiates rate contracts with suppliers. Part of their mandate is to provide value for electricity customers. They rejected TCE’s value proposal in their initial phases of consideration, but have since been asked by the government to move TCE, and other rejected projects, to their next stages. This was done as part of a desperate strategy to consider all options possible. The IESO’s next decision is in January. Hopefully they hold steady.

The “Green Energy” Claim

TCE makes many claims about this being a green energy technology because it will allow us to store energy. However, they do not mention the damage this project will cause to a stewarded forest, the diesel emissions required to build it, cement toxicity, and particulate pollution during construction. TCE is trying to Greenwash us. They are spreading misinformation by making vague claims that sound good to the ear in an effort to present an environmentally responsible public image. They slowly change their wording and language so that falsely perceptions about their environmental altruism stays in public discourse as long as possible.

I have heard many arguments that the movement of water to and from Georgian Bay during operation will be harmful for marine life (from people with expert backgrounds that do not have interest in TCE). However, I have also heard arguments (from other experts that do not have interest in TCE) that this is not necessarily the case depending on design and adherence to those designs. Therefore, I will not use effects on marine life in my rationale.

Alternative Technologies

Battery technology is far more adaptable than pumped storage technology and is rapidly improving. Although making batteries is not great for the environment either and the materials required to make them are non-renewable, at least they are highly recyclable. Batteries can be ~100% efficient, depending on how and where they are installed, and are getting better every day.

Given that Pickering will be closing in 2025, our $4,000,000,000 would be better invested in a new nuclear facility instead.

Competence

I simply do not trust TCE (formerly Trans Canada Pipelines) to build this project properly. They rebranded from Trans Canada Pipelines because of their horrible track record of failures in the product they are known for; oil pipelines. How can we trust them to build this facility properly? There is a lack of engineers and builders that are experienced with this technology, meaning it will be built by rookies. The facility will sit over a community of more than 100 households, and is next to a seismically active military base. This is not a good idea.

Economic Development

I am not interested in supporting a project I don’t believe in for money. TCE has informally suggested that it pay Meaford $1.5M per year as part of a Payment-in-lieu-of-taxes (PILT) schedule, and has hinted at offers to build community amenities. $1.5M is a measly offering that isn’t even close to the rate I’m paying in property taxes for my family home. Regardless of whether TCE offers it’s fair share, I will not be swayed by shiny new things.

I have heard people say that that this project will stimulate economic development in our community. This is a short term strategy that relies on the momentary economic changes this project will bring, which will collapse when the project is complete and the work force leaves. It would be like making long-term plans on a gold-rush. Things will be great when the workers with high-paying jobs come in to do their part. But once they are done, TCE cuts the ribbon, and the workers go home, our inflated local economy will collapse. I would rather build our community on a strong and stable economic foundation.

MY STANCE SOLIDIFIED

My “No” stance was solidified when I attended one of TCE’s Meaford Coffee Chats, hosted by focus group consultants, a community relations person, and a community liaison. In that chat, they said 2 crucial things:

1. The project was initiated by their business development team.
2. They have been struggling to figure out how to communicate why this project is essential for securing Ontario’s electricity future.

The first point makes it clear that this was not a researcher trying to figure out how to secure Ontario’s energy future. Instead, they were working on how to earn dividends by exploiting a price gap. This does not provide value to those of us investing in this project.

The second point gives me a few thoughts. Either this project does not actually secure the future and so they cannot make the argument, or they do not know what they are talking about well enough to explain it to people. In the Meaford coffee chat, TCE claimed they will have the best engineers in the world working on this. Maybe they decided to save money in their marketing and copy writing departments. Their rhetoric on this project is highly propagandistic, crafted in equal parts smoke, mirrors, and snake oil.

Conlusion: meaford council

As I said before, Meaford’s Municipal Council does not have the authority to make a ruling on this project. Despite this, I believe it is important for our council to make their thoughts known, establish an official opinion, and act as advocates for their ratepayers. Doing this will also make Meaford a champion for all Ontario and Canadian ratepayers, because it is all of our tax dollars going into this project. It is also important for the decision making powers like the IESO, and our MPP/MPPs to know how their customers/constituents feel about this.

If the people of Meaford are truly against this, it is Council’s job to make that known, and it is Council’s job to do something about it by passing targeted bylaws and zoning that will protect Municipality of Meaford residents from the harms of this project.

I have learned alot from our neighbours who gathered under the name, Save Georgian Bay, while conducting my own research to ensure their credibility. This group of local residents, cottagers, environmentalists, engineers, activists, consultants, and business owners have led the effort to increase awareness throughout Meaford and the surrounding communities.

The Environmental Assessment prepared by Save Georgian Bay in July 2020 for the Department of National Defense (DND) Training Centre in Meaford was instrumental in the changes made by TC Energy to the current PSP proposal. However, PSP is not a suitable technology for the delicate aquatic ecosystems of Georgian Bay. Alternative technologies are available to store unused electrical energy that is less expensive and environmentally friendly.