Potential EE & DR Opportunities in Indoor Agriculture Facilities

Amy Ellsworth

Rocky Mountain Utility Efficiency Exchange ConferenceSeptember 30 – October 2, 2015

Potential EE & DR OpportunitiesIn Cannabis Cultivation Facilities (Indoor Ag)

• Colorado Market

• Electricity Use

• Utility/Grower Pain Points

2

• EE & DR Opportunities

• Technologies to watch

• Trends

• Research Needed

Colorado Market Snapshot

833 Retail and 1,416 Medical Establishments

148,238 lbs. medical and retail marijuana sold

4.81 million units edible products sold

3

Source: CO Dept. of Revenue Marijuana Enforcement Division Annual Update, Feb. 2015.

Between 300,000 and

320,000 plants on average being

cultivated throughout 2014

4

Colorado Market

Impact per Pound

Produced Facility Type

Colorado Regulated

Market

74 Tons Indoor2000

kWh/lb

Greenhouse 100 kWh/lb

Outdoor ~Minimal

5

Source: Market size based on CO Dept. of Revenue Marijuana Enforcement Division Annual Update, Feb. 2015.

Electricity Use for Indoor Facility

6

Indoor cannabis

production requires

~2,000 kWh per pound

Source: Impact of Cannabis Production in the Pacific Northwest on Regional Electricity Loads, Northwest Power Planning Council, Sept 3rd 2014

5%

38%

21%1%

2%

3%

30%

Space heating

Lighting

AC

Drying

CO2 Injection

Water handling

Venting/dehumidification

Put it another way

7

Between 300,000 and 320,000 plants on average cultivated in Colorado

At 4.7 cycles per year

Powers 13,000 CO Homes

15,900 Lamps300,000 Plants

IN 2014 GROW LAMPS HOMES

2.5 plants per lamp

1,000 watts per lamp (flowering phase)

12 hours per lamp per day

Roughly 111,000,000 kWh

An average home is CO uses 8,544 kWh (EIA 2013)

Putting it into Perspective

8

U.S. Electricity for Cannabis production is equivalent to

that of

2 MILLIONaverage U.S.

homes

Indoor Ag Energy Use Particulars and Perversions

• Exclusion of daylight

• Excessive cooling

• Heat and moisture removal problems

• Odor and noise suppression

• Processing plants into other products

• CO2 production by burning fossil fuel indoors

9

The only sector to have been passed over by four decades of energy efficiency policy, incentives, and education

Utility Pain Points

• Energy Consumption

• Sudden increases in localized demand

• Illegal at the Federal level

• Customer instability

• Pressure from cities

• Clean Power Plan

10

Growers’ Pain Points

• Energy cost

• Highly competitive, thin margins

• Stigmatized and over-regulated

11

• EE programs, energy service

• Cash flow & financing

• Rapidly changing industry

2015 2025 2035 2045

$0.06

$0.08

$0.10

$0.12

$0.14

2005$0

$1,250$2,500$3,750$5,000$6,250

2010 2012 2014 2016 2018

Energy Efficiency Opportunities

12

Cost-effective efficiency

improvements of more than 75% are conceivable- Evan Mills, Ph.D.

Its all about spectrum and brightness

• Plants respond to the photo-synthetically active spectrum (PAR) - the ag community counts this as “photons” of light

• Cost metric is based on the light seen by plants each second, summed over a 24-hour period known as “Daily Light Integral” (DLI).

13

MetalHalide InductionLEDsPlasmaSunlight High-Press

Sodium

And then there’s the cost…

14

$0.53 $0.71$0.45

$2.01$2.31

$2.93

$4.83 $4.84

$2.58$1.79

$2.61$2.19

$2.49 $2.44

$3.68$3.16

$0

$1

$2

$3

$4

$5

$6

Upfront

Annual

Co

st O

f Li

ght

($/D

LI/s

qft

.)

EE Potential in Colorado(back of the envelope)

15

Facility Type kWh/lb Estimated % of Facilities

Total Regulated lbs Produced Annually

Base kWh Impact Annually

Technical Potential kWh Savings Annual (30% of Base)

Market Potential Savings kWh (25% of Tech)

Indoor 2,000 90% 133,414 266,828,400 80,048,520 20,012,130

Greenhouse 100 9% 13,341 1,334,142 Assume zero -

Outdoor Minimal 1% 1,482 - Assume zero -

Total 100% 148,238 268,162,542 80,048,520 20,012,130

Market potential is equal to powering 2,300 Colorado homes a year.

DR Opportunities

• Significant potential for load factor improvement• Vegetative: Lighting - 18 hours on / 6 hours off

• Flowering: Lighting - 12 hours on / 12 hours off

• End uses can be managed with controls systems to minimize peak load: lighting; HVAC; ventilation; dehumidification; etc.

16

Technologies to watch:

Farm in a box

17

daylight harvesting technology

Technologies to watch: Suncast

18

and delivers it under the

canopy

channels sunlight through

fiber optics

Technologies to watch: Surna Reflector and Dehumidifier

19

20

Cultivation facilities are getting larger

Legalization is on the 2016 ballot in 12 states; Medical in 5 states

New Colorado Policies

Interstate commerce will change everything –

Edible and pharmaceutical products

Trends and Implications Going Forward

• Moving away from requiring owners to operate retail store AND be a producer.

• Likely to restrict outdoor producers

More information is needed…

Comprehensive technical and market research to support

– Baseline energy profile

– EE and DR: analysis of potential, savings, cost effectiveness,

– Market Factors: barriers, opportunities and acceptance

21

Can inform program design recommendations for

utility indoor agriculture program(s)

Amy EllsworthPrincipal, Energy Services

Amy.Ellsworth@cadmusgroup.com

Office (303) 389-2510

LinkedIn.com/company/the-Cadmus-group

@CadmusGroup

Facebook.com/CadmusGroup