Niagara tunnel will increase Ontario generation

The announcement comes during a time that Ontario is struggling to meet its energy needs as it shuts down its coal-fired plants.

Strabag AG was chosen along with several other subcontractors to begin construction of the tunnel, named the Niagara Tunnel Project — which will supply additional water from above Niagara Falls to the generating complex at Queenston Heights.

The project is projected to cost about $985-million and construction is expected to begin in September, the OPG said.

It is expected to be completed by 2009 and will begin providing electricity to the Ontario market late that year.

The tunnel will boost the output of the 50-year-old Sir Adam Beck Generating Station in Niagara Falls by about 1.6 terawatt hours per year.

It will provide enough renewable electricity to power about 160,000 homes or a city twice the size of Niagara Falls.

The Ontario government has committed to providing the funding for the project. The OPG said that about 80 per cent of the project's spending will be in Ontario, including hiring up to 350 construction workers over the four-year term of the project.

"The new tunnel will be able to better utilize Niagara River water for electricity generation, while not detracting in any way from the beauty of Niagara Falls," Jim Hankinson, president and chief executive officer of OPG, said in a statement.