Background
Ontario’s electricity system is on the cusp of transformation. Faced with rising demand for electricity, coupled with commitments to transition to cleaner sources of supply, Ontario’s electricity system will grow significantly in the coming decades. To support this growth, the province is diversifying its electricity mix, which will require accompanying energy storage solutions to reduce energy generation curtailment and ensure a stable supply during peak demand periods.
The Ontario Pumped Hydro Storage (OPS) Project, a prospective partnership between TC Energy Corporation and the Saugeen Ojibway Nation, is a direct response to these needs. The partnership aims to construct a 1,000-megawatt pumped hydro storage facility to enhance the reliability and efficiency of Ontario’s electricity system.
Our report, “Made-in-Ontario Pumped Hydro Storage: Economic and Social Value Benefits”, investigates the expected economic and social benefits of OPS’s construction and operations between 2024 and 2072. It also highlights the significance of these benefits by comparing them with similar investments in the general economy and in a battery storage alternative.
Agent-based Modelling with AI
CANCEA’s sophisticated agent-based modeling, complemented by artificial intelligence, provides a robust platform for evaluating the OPS Project. This approach simulates the socio-economic landscape down to individuals, businesses, and governmental levels, utilizing a rich dataset including demographics and financials, and considers over 5,000 topics related to societal sustainability.
Economic and Social Contributions of the OPS Project
The OPS project is projected to inject over $6.8 billion into the Canadian economy over the next 50 years, with 90% of this activity remaining in Ontario. It also stands to generate $3.9 billion in wages and 41,200 jobs, 66% of which are full-time positions. Socially, the project benefits 110,000 Ontarians spanning 37,000 households, most of which are in rural regions. By targeting primarily young individuals, the Project can also help to address housing unaffordability challenges across the province. In total, it generates $450 million in social value, reflecting substantial well-being improvements across Ontario.
Comparison with General Economy Investments
Moreover, OPS creates considerably higher economic and social benefits than those typically generated by equivalent investments in Ontario’s general economy. In particular, it produces 1.7 times more economic activity, as well as 1.4 times more high-quality full-time jobs for Ontarians. The Project’s support to the province’s supply chain is also reflected by the fact that it generates 2.3 times more construction and manufacturing jobs. It also targets significantly more rural households, focusing the value generated on regions that can benefit the most from increased economic activity.
Superiority over Battery Energy Storage Systems (BESS)
In comparative terms, OPS outperforms a similarly scaled Battery Energy Storage System (BESS) in key economic and social metrics. Over a 20-year period, OPS is projected to offer 2.5 times the economic benefits and 2.1 times the social value of the BESS alternative. This comparison underscores OPS’s enhanced efficacy in supporting local supply chains, generating employment, and delivering greater overall value to the community.
Concluding Remarks
The Ontario Pumped Hydro Storage Project is more than just an energy initiative; it is a significant contributor to Ontario’s economic and social development. By providing a detailed comparison with general economy investments and alternative energy storage solutions, this report demonstrates OPS’s potential to play a critical role in meeting Ontario’s future energy needs while fostering economic growth and social well-being.
Download the full report: Made-in-Ontario Pumped Hydro Storage
