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The Buzz about Marijuana

Legalization of marijuana is happening at a rapid pace. In fact, it’s been called the fastest growing industry in the United States. Washington D.C. and 29 states now allow marijuana to be grown for medicinal or recreational use. Almost all these states are in the northeastern or western U.S., but legalization is spreading into the Midwest and South as well.

Growing marijuana is extremely energy-intensive, which means legalization is having a profound impact on the utility industry. In fact, the Northwest Power & Conservation Council (NPCC) has classified indoor cannabis production as an emerging market it intends to study, putting marijuana in the same category as rooftop solar and data centers. Based on the minimal data it already has, the NPCC forecasts a regional load between 180 and 300 megawatts by 2035 for indoor growing operations in Washington, Oregon, Idaho and Montana. This is equivalent to the annual electricity use of 126,000 to 204,000 northwestern homes.

As the cannabis industry continues to grow, the electric demands of cultivation facilities can create challenges on the utility distribution systems while presenting opportunities for energy efficiency programs.

No two facilities are alike

Cannabis is grown indoors, outdoors and in greenhouses. Outdoor production of cannabis is far less energy-intensive than greenhouse or indoor production; however, producers who choose to grow outdoors are subject to the natural climate and environment. This constrains producers to one to two growing cycles a year while indoor production averages 4.7 cycles a year with an average cycle duration of 78 days.   

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With over double the amount of growing cycles than outdoor production, indoor cannabis growth appeals to many within the industry. On the other hand, the indoor production of cannabis is very energy-intensive: it requires massive amounts of energy for lighting, cooling, and de-humidification, with long hours year-round. In terms of overall energy intensity per square foot, it’s at the same caliber as data centers. Although the costs associated with indoor production are much higher than outdoor production, growing indoors allows growers to control every aspect of their product. This includes greater environmental control, year-round growth allowing for more crop cycles, higher quality products, less risk associated with weather, and improved security. 

As the industry moves from the black market to mainstream, growers will be looking for help both in terms of securing enough power as well as in learning about potential energy efficiency opportunities. This idea appeals to many utilities, but the early stage of this industry means there is a lack of hard data regarding its energy usage. Even the earliest states to legalize marijuana struggle to find effective energy solutions as no two facilities are the same. Marijuana growing facilities can range from half a dozen seedlings in the basement of a suburban home to hundreds of plants in an industrial warehouse. The one thing these facilities have in common is that they use much more energy than outdoor growers, their conventional counterparts.  

This can potentially wreak havoc on utility distribution systems if the utilities aren’t engaged appropriately to ensure resource availability. For example, people growing in residential buildings are stressing the distribution systems since they were not sized for these large, continuous loads, and larger industrial grow houses are springing up in re-purposed, often abandoned warehouses. Many of these had been sitting ideally on the distribution systems, but are now suddenly introducing significant load on the distribution circuit.

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A growing market for energy efficiency programs

As an industry, we have an unprecedented opportunity to cultivate new energy efficiency program offerings with the emergence of hundreds, if not thousands, of production facilities being designed. With this opportunity comes challenge rooted directly in the industry’s history: since the cannabis market has grown out of a strong and long-standing black market, the typical grower’s building standards are often whatever is fastest and cheapest. While most growers acknowledge that energy efficiency is important, they also do not believe it to be critical and view high energy costs as a cost of doing business.

Lighting is the most energy-intensive component of the cultivation environment and is also a significant contributor to the cooling load. The design of a facility’s lighting system and the types of lamps utilized in the grow process will affect both crop yield and quality, making them extremely valuable. Most growers are still using high-intensity discharge (HID) lamps as their primary lighting source, but LED technology is starting to gain traction in the market. In addition to providing significant energy savings, LEDs can contribute to higher crop yield – but they can also require operational changes with watering and scheduling. While there is a lot of hype around LEDs, growers are still somewhat hesitant to make the switch.

Since cooling and de-humidification can account for 50 percent or more of the total energy consumption, proper system design and installation are crucial to the operational efficiency of a sustainable cultivation process. Since there is no typical facility, the system design will vary widely based on size, layout, growing method, lighting system, watering schedule and local weather conditions. As with lighting, climate control presents a significant opportunity for efficiency improvements.

As the cannabis market continues to grow, utilities are giving it more attention. Several have begun to offer targeted energy efficiency programs, but most are serving indoor grow facilities through their standard pre-existing programs, bundling them where they may not necessarily fit. This effort is a start, but the unique lighting and climate control demands of the cannabis industry call for more specific attention from utilities.

Fortunately, we are still early in the process and have time to significantly impact  the energy efficiency of the indoor cannabis market. Big growers may need more power than a utility traditionally supplies to their buildings, which can create opportunities for energy infrastructure upgrades—including the installation of solar and battery storage systems.

As marijuana growing operations become more common throughout the United States, it’s a good idea to take steps to prepare your energy efficiency programs for this industry’s specialized energy needs. Franklin Energy’s agriculture programs span the entire sector, and we’ve got a personalized solution for your unique program demands. Schedule a meeting with an expert to learn more.

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Ed McGlynn
Written by Ed McGlynn

VP of Large C&I Strategy
When describing Ed McGlynn’s duties, the list is not a short one. He develops new products and services for the commercial and industrial segment, offers consulting advice to electric and gas utilities and provides support to Franklin Energy’s regional operation teams, which implement demand side management programs across the country. His 30 years of experience with utilities and demand side management have allowed him to develop and apply vision, leadership and innovation. Ed serves on the board of directors for the New Buildings Institute (NBI) and is a former board member of the Association of Energy Service Professionals (AESP) and the Compressed Air Challenge (CAC). An electrical engineer, Ed also holds an MBA from Providence College and is a certified energy manager (CEM) and certified building commissioning professional.

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