Curbing the Cannabis Industry’s Appetite for Energy

November 12, 2018

A look at energy consumption in the cannabis industry and suggestions on how cultivator’s can reduce those costs.

Cannabis cultivation has a problem, a big problem: the electric bill! Earlier in my cannabis career, I heard growers complain about the cost of electricity eating into their profits-but now the situation is much worse, while the stakes are far greater. Energy consumption is under greater scrutiny than ever by regulators because of concerns over fossil fuels hastening climate change and the cost of expanding the grid. This means the cannabis industry better find solutions to cut down on its power use, or else the government will-and no one wants that.

Just how bad is the energy problem in the cannabis industry? Energy inputs are estimated by several studies to be perhaps as much as half of total indoor cannabis cultivation costs. Based on this estimate, let’s assume 2000 kW/h per pound of medicine and a typical energy cost of $0.24 (1). For growing a single pound of cannabis, that’s $480 worth of energy! And just what is this energy used for? It’s not just lighting; also sucking up power are air conditioners and chillers, dehumidifiers, carbon and high-efficiency particulate air (HEPA) filters, fans, and system controllers. In a 2016 study done for investor-owned San Diego Gas & Electric, Evergreen Economics broke down the energy consumption for indoor cannabis production and found that lighting accounts for 38% of the energy consumed, venting 30%, and air conditioning 21% (2). Furthermore, when one considers the current means of energy production, the cultivation of 1 kg of cannabis results in the production of 4600 kg of carbon dioxide.

Clearly, there is plenty of room for improvement and, just as fortunately, there are many ways to improve. For now, let’s just talk about two: the cultivation structure and how it is illuminated. According to BOTEC Analysis, indoor cultivation has the highest energy consumption levels with 4400 kWh, 6100 KWh/kg. Greenhouses have much lower energy demands with 6 kWh, 580 kWh/kg (3). (BOTEC’s study considers the energy consumption of outdoor cultivation to be minimal.) This is why I recommend to cultivators that they start their site and structure selection process by giving serious consideration to a greenhouse.

In California, my home state, the Department of Agriculture has projected the following trends: There will be a shift in production from the northern to the southern part of the state while the use of controlled-environment agriculture (CEA) is forecast to jump dramatically over 2–3 years from 16% to more than 50% (4). I expect there will always be indoor, greenhouse, and outdoor production, and there are advantages to all these methods. Still, I would like to see the percentage of greenhouse facilities increase for the reduction of energy use while still enabling a controlled environment for maximum yield and quality.

Light emitting diodes (LEDs) are finding their way into more and more grows, despite skepticism by cultivators. Most of the controversy centers around sufficient power during the flowering phase and the nonsolar nature of the spectrum. Both concerns are not issues in the greenhouse, where LEDs serve to augment the solar spectrum during off-peak times of solar illumination such as early morning, late afternoon, winter months, and cloudy days. However, the energy benefits are real and substantial: Most manufacturers claim that their 600-W fixture can replace a 1000-W high-intensity fixture, resulting in a 40% reduction in lighting costs. This efficiency is further compounded by energy savings associated with cooling because of the heat produced from lighting; therefore, these practices are being adopted by CEA vegetable growers on a global scale. The reason is simple: LEDs save money by saving energy in the CEA setting while increasing yield and quality.

As the acceptance of cannabis spreads across the nation and world, it’s logical to assume more will be grown, which, of course, means an increasing demand for electricity. The industry would be wise to demonstrate its responsibility by acting now to cut back on power consumption. Because if cultivators don’t, strangers may be more than willing to act for them-and when they do, they may not have the industry’s wellbeing in mind.

An Expert’s Point of View

When looking for solutions to the cannabis industry’s high energy consumption, it’s necessary to have experts who are familiar with both cultivation and how utilities can help growers. Dan Duran has that knowledge, having worked for power companies and, as a professor, having researched cultivators’ use of power. Dan spoke with Cannabis Science and Technology magazine to share how the two sides can work together.

What has been your background and experience with the cannabis sector?

Dan Duran: I am a veteran of 25 years in the corporate world, where I led operations and marketing teams in the IT and energy sectors, including stints with American Telephone and Telegraph, Nippon Electric Corp., Southern California Edison, and Sempra Energy. I decided, after the tragic events on September 11, to move into academia and have been a faculty member at a California liberal arts college since then. At Whittier College, I study domestic and international sustainable development with a focus on energy and renewable resource management. I founded Energized Solutions, LLC, in 2002 with the goal to provide real-world data and research pertaining to sustainable development and renewable resource management to be used in and out of the classroom. Dr. Cinzia Fissore, who joined Energized Solutions a few years ago, and I have planned and executed several field-based research projects pertaining to agriculture for the California Public Utilities Commission (CPUC) and California-based electric, natural gas, and water utilities. We have conducted more than 200 field visits with a broad spectrum of growers, from row crops to dairy, nuts, and vineyards. Our goal is to better understand current practices, help the utilities and other stakeholders learn more about their customers, and develop and deliver programs to improve energy–water efficiency and other sustainability-focused programs and technical services. Over the last few years, we have tightened our focus on the urban agriculture sector and more specifically on CEA and greenhouse operations, especially the growth in Southern California.

You mentioned your energy–water work with utilities and the agriculture sector. What are the utilities thinking and doing with respect to the legalized and fast-growing cannabis business in California, and specifically with the increasing focus on CEA and greenhouse production by growers?

Duran: The good news is that a few utilities have recognized the need and opportunity to work with CEA and greenhouse growers, including those in urban areas. The case is that the majority of the utilities have opted to take a “wait and see” position. As a veteran manager of several utilities, the reality is that utilities are far more risk-adverse than other firms in the private or public arena, and while most of them highlight their commitment to serving customer needs, their primary goal is to protect investors by heeding to the dictates and regulations of the CPUC or equivalent oversight agency. For example, while the major utilities in California have dedicated agriculture account executives or service representatives that work with the large growers and post-harvest processors that have significant energy and water needs, the unfortunate case is that they rarely, if ever, interact, and know very little about the needs of CEA and greenhouse growers. Another factor is that many of those growers have operated in a “gray” area to elude the detection by utilities and most often take the “fast” in–out operations way rather than a systems approach. I have spoken to several of the utilities and the large consulting firms that help them with strategic planning and program evaluation, and while there are a few field people who recognize the need to learn and support growers, the senior management teams have almost consistently chosen to take limited initiatives. This is not a good situation, as the growing number and size of CEA and greenhouse growers need to better understand and take advantage of “Time of Use rates,” energy-efficiency programs and incentives, service planning infrastructure support, technical training on current and innovative technologies, and a broad spectrum of other services and support provided to the traditional medium to big users. Utilities increasingly want to be perceived as being environmentally responsible with strong corporate social responsibility agendas, but in this case, they have largely missed the opportunity to acknowledge the emergence of this new base of customers that are producing a high-value crop with significant social and economic benefits.

What should current and hopeful growers expect from the utilities and what is the most effective approach to use in securing technical and financial support from them?

Duran: Utilities are typically organized by function, such as distribution, energy–water efficiency, service planning, customer education, regulatory, and public relations. My first piece of advice is to do a bit of internet leg work and determine where the agriculture support team is situated and to contact the local account executive or service representative. While most of the utility agriculture teams are located in the traditional rural locales, they are the most likely to respond to a request for information on services. Growers should also identify the local or regional public affairs or equivalent representative because they are the most attuned to listening to users and their professional association advocates. The public affairs folks are charged to be the face of the utility to the local community and the local power structure, and they are responsible for articulating problems and opportunities to their utility management organization. While most of the mid- to larger utilities run education and training programs on efficiency strategies and new product offerings, they have yet to develop and offer programs customized to the needs of the CEA or greenhouse cannabis grower. With the exception of the recent 2017 Grower Report prepared by the Cannabis Conservancy for the Colorado Energy Office (5), there is a lack of solid and current data on the energy spends and efficiency levels of different energy-intensive (for example, lighting, heating, ventilation, and air conditioning [HVAC], and CO2 generation) and water-operating modes used for outdoor and indoor operations. Still, it is commonly stated and believed that the energy spend constitutes between 30–45% of CEA-greenhouse grower operations. There is a real lack of understanding regarding which specific energy-use areas can be best addressed via more energy-efficient technologies and what their impact is on the bottom line.

What should utilities put on their agenda to prepare and support the CEA-greenhouse growers?

Duran: The cannabis growers market has several key stakeholders, and the local energy, water, and waste utilities all have important roles to play in helping this industry mature with respect to energy efficiency, water management, and waste practices. At the moment, I am in conversation with several Southern California utilities about how best to prepare and support the CEA and greenhouse growers. The most important step is for the utilities to prepare and execute a data-gathering plan that identifies and records the current energy, water, and waste practices-what we call a baseline study. Utilities need to figure out where the near-future CEA-greenhouse growth will be with respect to their distribution systems, including both the electric and water distribution grids. Electric utilities tend to be “grid-focused,” and it is critical that they understand where the electric load will grow and how to best support it. The corollary need is for utilities to identify and work with the growers to provide a spectrum of services and support, from infrastructure service planning to information on how demand charges are calculated, the available time of use and other rate options, and the incentives and rebates for current and innovative technologies, including LED and virtual management systems. I believe that utilities will be motivated to respond to the growers who can provide data on plant-cycle growing needs, energy consumption by equipment and system, and operations practices. My hope is that the sustainably and profit-focused CEA sector and greenhouse growers will work with the utilities, equipment and tech providers, and consultants to plan and implement a triple bottom line strategy that generates value and simultaneously benefits people, the planet, and profits. It is my impression that utilities are very motivated to work with other sectors to promote leadership in efficiency and design (LEED) buildings and facilities that are both energy efficient and operationally advanced. My “call” to growers is to work with their local utilities (gas, electric, water, and waste), equipment and technology providers, and experienced consultants to lay the foundation for LEED growing operations that produce quality products using environmentally-responsible growing operations that increase bottom-line profits and generate value for both consumers and the cities and counties in which they operate.

Conclusion

We are entering a new era of cooperation and coordination between the cannabis industry and the public utilities. Reducing energy consumption and adopting more sustainable practices should become a high priority for cultivators. This will show the public and the utility companies that cannabis cultivators have a strong commitment to the environment, while still making a profit. This approach will generate a positive relationship with the utilities, create goodwill in the public eye, and demonstrate that cannabis cultivation is on the cutting edge of sustainability. By being innovative in cultivation practices and becoming leaders in lowering energy usage, cannabis cultivators will show the world that they are excellent stewards of our natural resources and good partners with public utilities.

About the Interviewee

Dr. Dan Duran is an Associate Professor at Whittier College where he teaches sustainable development. He is also the founder and principal of Energized Solutions, LLC, a CPUC-certified minority-owned business (MBE). His career includes senior planning and operations work with energy utilities and water agencies. His ongoing research and consulting focus is in the energy–water nexus, especially with the California agriculture community. He has met with hundreds of agriculture producers to identify their sustainability and best practices, and he works with utilities to optimize the potential for CEA cannabis production.

About the Guest Columnist

Dr. Roger Kern is a scientist and technologist who cares deeply about the cultivation and health of plants in the cannabis industry. With his PhD in microbiology from the University of California, Davis, Plant Growth Laboratory, he solves the most challenging problems in hydroponics, from studying the root microbiome to developing nutrients and lighting systems to ensure plant health and a disease-free lifecycle. He spent 22 years at NASA’s Jet Propulsion Laboratory as a scientist, technologist, and research leader before becoming the President of Agate Biosciences, a consulting firm for project management, systems engineering, and science in CEA for the past eight years. He leads developments to optimize sustainability, consistency, quality, and yield without compromising plant health. Direct correspondence to: rkern@agatebiosciences.com

References

  1. J.P. Caulkins, “Estimated Cost of Production for Legalized Cannabis” (RAND Drug Policy Research Center, 2012).
  2. Evergreen Economics, “SDG&E Cannabis Agriculture Energy Demand Study” (Prepared for San Diego Gas & Electric Company, 2016).
  3. M. O’Hare, D. Sanchez, and P. Alstone, “Environmental Risks and Opportunities in Cannabis Cultivation” (BOTEC Analysis Corporation internal publication, June 2013).
  4. J. Remillard and N. Collins, “Trends and Observations of Energy Use in the Cannabis Industry” (ACEEE Summer Study on Energy Efficiency in Industry, 2017).
  5. Colorado Energy Office, “Energy Use in the Colorado Cannabis Industry” (Fall 2018).

How to Cite This Article

R. Kern, Cannabis Science and Technology1(4), 18-20 (2018).