Off-grid: how soaring cannabis markets are forcing an energy rethink
Power Technology [April 22, 2020]
Growing cannabis is an expensive and energy consuming business, which has already led to large-scale power outages in Canada and the US. One company has taken to producing its own power, but can the industry as a whole address the challenges in the same way? Andrew Tunnicliffe finds out.
To say North America’s cannabis sector is on a high would be an understatement, and a pretty unfortunate pun, but it is. It’s booming and there appears to be no decline in appetite for its produce since states across the US and Canada legalised its sale for recreational use.
In 2015, Canadian Prime Minister Justin Trudeau said he would legalise cannabis use, making good on that in 2018. In the US, recreational use is permitted in 11 states, Illinois being the latest at the beginning of 2020; in total it is legal in 33 states for recreational or medicinal purposes.
Prohibition Partners estimates the regulated market could be worth more than $47bn within five years. However, it says that the sector in the US is hampered by varying levels of regulation whilst the Canadian market continues to be bypassed for the black market by many consumers. Despite this, the industry is flourishing with a double digit annual growth rate.
The impact legal marijuana cultivation is having on the economy is one thing, its impact on energy providers is an entirely different matter. In 2015, Pacific Power, which supplies the Northwest US, said seven summer blackouts were the result of businesses and individuals growing the crop. Concerns about how much demand growth is placing on energy supplies echoed across states which have legalised it.
Is going off grid a necessity?
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 route 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, he says, was the biggest issue his business faced from the outset.
Although his facility had historically been supplied from the grid, it was removed 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.