TC Energy Corporation TRP, a Canada-based energy infrastructure operator, announced that its proposed Ontario Pumped Storage Project (OPSP) is moving to its final evaluation stage. This exciting development marks a milestone in Ontario’s ambitious plans for clean economic growth and a transition to an emission-free electricity sector. With the Ministry of Energy beginning the final evaluation, TC Energy aims to provide a sustainable solution that aligns with the province’s goals.

Let’s discuss what TRP’s OPSP is all about, its significance for Ontario, and the expected timeline for its implementation.

What is Pumped Storage?

Pumped storage is a form of energy loading that uses the power of gravity and water to generate electricity. During periods of low electricity demand, excess energy is used to pump water from a lower to an upper reservoir.

When electricity demand increases, water is released from the upper reservoir that flows through turbines to generate electricity. This process facilitates efficient storage and utilization of clean energy.

Ontario’s Largest Energy Storage Project

The proposed OPSP, backed by TC Energy and the Saugeen Ojibway Nation, seeks to provide a groundbreaking energy storage solution in Ontario. If approved, this project will become the province’s largest energy storage facility, capable of storing enough clean electricity to power 1 million homes for 11 hours. By leveraging long-duration storage, the project will play a pivotal role in supporting Ontario’s clean energy transition.

Benefits for Ontario

The pumped storage solution is expected to contribute to the development of the province in many ways:

Clean Energy Delivery: The OPSP will deliver clean energy during times of peak demand, establishing a stable electricity transmission network for the province’s domestic and commercial use.

Economic Growth: By accelerating Ontario’s clean energy transition, the project will stimulate the province’s economic growth. It will create job opportunities and encourage investments in the clean energy sector.

Affordable Solution: The OPSP will help reduce electricity costs for ratepayers. It will drive the province’s clean energy goals while ensuring affordability.

Final Evaluation and Decision

The Canadian Ministry of Energy will carefully assess the project’s feasibility, environmental impact and economic viability. A final decision on the project’s approval is expected to be rendered by the end of the year.

Partnership and Investment Decision

In order to proceed with the project, TC Energy’s board of directors must approve the OPSP. Additionally, a successful collaboration agreement with the Saugeen Ojibway Nation is essential. Once these prerequisites are met, TRP aims to make a final investment decision in 2024, paving the way for the project’s implementation.

Expected Timeline

The OPSP is anticipated to go into operation in the early 2030s, given all required approvals are granted. This timeline reflects the commitment of TC Energy, the Saugeen Ojibway Nation and the Canadian Ministry of Energy to expedite the transition toward a cleaner and more sustainable energy future.

Zacks Rank and Key Picks

Currently, TRP carries a Zacks Rank #3 (Buy).

Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Murphy USA MUSA and NGL Energy Partners NGL, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Evolution Petroleum is worth approximately $265.15 million. EPM currently pays a dividend of 48 cents per share, or 6.02% on an annual basis.

The company currently has a forward P/E ratio of 7.59. In comparison, its industry has an average forward P/E of 10.60, which means EPM is trading at a discount to the group.

Murphy USA is valued at around $6.64 billion. In the past year, its shares have risen 14.3%.

MUSA currently pays a dividend of $1.52 per share, or 0.50% on an annual basis. Its payout ratio currently sits at 6% of earnings.

NGL Energy Partners is valued at around $525.07 million. In the past year, its units have risen 180.9%.

The partnership currently has a forward P/E ratio of 4.57. In comparison, its industry has an average forward P/E of 14.10, which means NGL is trading at a discount to the group.

Murphy USA Inc. (MUSA): Free Stock Analysis Report

TC Energy Corporation (TRP): Free Stock Analysis Report

NGL Energy Partners LP (NGL): Free Stock Analysis Report

Evolution Petroleum Corporation, Inc. (EPM): Free Stock Analysis Report

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