Off-grid: how soaring cannabis markets are forcing an energy rethink

It stands to reason that such operations consume significant amounts of energy. “You’re trying to make an ideal summer day, with abnormal amounts of water to the root system at the same time,” says Edward Dow of Solar Therapeutics. Earlier this year, the Massachusetts-based cannabis company became one of, if not the, first to generate its own power via a 5.5MW microgrid. Power supply, Dow says, was the biggest issue his business faced from the outset.

Although his facility had historically been supplied from the grid, it was disconnected a few years before he moved in, leading to a conundrum. “This is really the biggest hurdle we faced,” he explains, “our options were to either fund our own microgrid or pay the utility billions of dollars and wait two and a half years for the power.” Instead, the company installed solar arrays for when the sun is shining and two natural gas combined heat and power units for the rest of the time.

Although the decision is a sustainable one, it didn’t get the support of the utility says Dow. “We really tried to work with the utility company as best we could, but in the end the best solution for us was to purchase all our own assets,” he explains. It’s an interesting approach that some energy providers are taking. Arguably it would be more logical for providers to work with cannabis growers, particularly given the strain they put on the grid and the opportunities engaging with the multibillion dollar industry might present.

It’s something Dow feels strongly on, however he says that engagement is only now starting to happen. “We're trying to work towards more of a partnership in which we can sell back power to the grid in the event of emergency, or provide standby power in the warmer times of the year. So we're trying to get there, but utilities are not in the business of letting people make their own power,” he says.

Perhaps the approach he is taking might change all that. Dow says there is an opportunity for microgrid operators and utility providers to both benefit, if utilities can ‘”get their head around it”, something he says they have struggled with. One of his proposals is for power providers to incentivise microgrid ownership by paying companies the equivalent of the connection fee, in return receiving any surplus power to push back into the grid.

Dow’s operation is unique though, very few commercial cannabis growers have such infrastructure and many more are one-man operations, often working out of residential properties.

“The increasing electricity demand we are seeing from this industry is happening especially fast,” warns Terry Young, vice president of policy, engagement and innovation at the Independent Electricity System Operator (IESO), which operates Ontario’s power grid in Canada. “The industry consumed a total of 93,000 MWh of electricity in 2018 and is expected to grow by 1,250% by 2024 to 1,258,000 MWh. By 2024, consumption from the cannabis industry is expected to total just under 1% of the province’s total power consumption.”

Young says producing one pound of cannabis takes about 2,000 kWh, around two and a half months’ consumption of the average Canadian household. “The energy it takes to power lighting, heating, pumps and ventilation all adds up. Indoor cannabis facilities use more, almost three and a half times more electricity per square foot than lit vegetable greenhouses,” he adds.

It’s clear the matter needs addressing, something IESO says it is working with growers to do but it requires a “multitude of solutions”. It says that as well as working with businesses and community representatives, it is conducting studies to identify the best solutions for growers and the region.

One such study was the Greenhouse Energy Profile, summarising how energy is used across agricultural sub-sectors and regions in 2018, and forecasting energy use and savings potential from 2019 to 2024. “The Greenhouse Energy Profile shows that there is great potential for energy efficiency while reducing the need for new supply to the area and enabling new businesses to connect,” Young says. Another study is currently being conducted with the aim of developing best practice for energy management in the industry.

IESO is also running initiatives aimed at helping growers cut their energy footprint, including the Save on Energy Retrofit programme. It supports growers in managing their consumption through incentives to upgrade various equipment and lighting, such as switching to LED grow lights that would cut consumption by up to 60%.

For Dow there is already an answer to this challenge. He believes, given the climate emergency and growing appetite among consumers for environmentally conscious brands, growers are starting to look at his type of solution. “I'm hearing a lot more people saying they're committed to doing it [microgrids] than I've ever heard before,” he says. “They should have started some time ago though,” he adds, aiming a little criticism at larger companies that were “either too lazy or didn’t have the foresight”.

However, for growers considering retrofitting, it isn’t cheap or easy. “I've seen these big operations trying to retrofit and you might as well start anew at that point,” Dow says, citing costs as the single most prohibitive factor. However, if state regulators take a lead from Massachusetts, which requires the sector to design new facilities to use a maximum of 36 watts per square foot, things might change.

For now, growers can play their part as easily as replacing bulbs that, in turn, would reduce the need for heat and ultimately cut cooling costs. For IESO’s part, it says it is committed to helping the sector meet the costs of such work with up to a 30% contribution. “Growing cannabis can require up to 18 to 20 hours of lighting per day, accounting for as much as 70% of energy costs. To put it in perspective, vegetable growers typically keep their lights on for just eight or nine hours per day,” says Young.

Given that, according to a recent study, the cannabis industry is second only to data centres for energy consumption, the power it consumes has to be curtailed. Whether that can be done by growers, energy providers, regulators or a mix of all remains to be seen. Dow, however, has a simple message: working together is the only effective way to bring about change.