Marijuana Business Magazine January 2019

Marijuana Business Magazine | January 2019 82 Regulations Environmental Navigating Getting a Handle on Energy Use Cultivators who proactively cut their power use in response to burgeoning energy regulations are likely to be more profitable and competitive, according to experts who spoke at a recent cannabis sustainability symposium. The conference was organized by the Denver health department and presented by the Cannabis Certification Council. Here are three tips from the experts on how cannabis cultivators can conserve energy: 1. TRACK YOUR ENERGY USE Kaitlin Urso, environmental protection specialist at the Colorado Department of Public Health and Environment, said it’s important for growers to keep close tabs on their energy use—even if it means starting small, such as monitoring monthly bills. Joe Sullivan, head of grower partnerships and energy technologies for Denver energy design firm Cultivate Energy Optimization, said utilities don’t want to build additional power plants, so it’s a “win-win situation” when growers become more energy efficient. Cultivate Energy audits growers’ facilities to identify where energy use is highest—and how that consumption can be reduced. Awalk-through audit can be done in three hours for $600 or so.Amore comprehensive, on-site audit measuring each piece of equipment and electrical circuit can take two days and cost as much as $5,000-$6,000, Sullivan said. But here’s the enticement: Some utilities such as Xcel Energy in Colorado will pay for an energy audit because it’s in their interest to see energy use lowered. 2. SET UP A STRATEGY FOR IMPROVING PROCESSES AND CALCULATE THE PAYBACK Once an audit is done, a grower can begin to assess the upgrades he or she might want to make as well as how each improvement would affect productivity. Tackle the easy ones first. “By far, the lowest-hanging fruit (usually) is scheduling your lights,” said Brad Queen, a mechanical engineer and founder of Cube Resources, a Colorado energy consulting firm. It sounds simple, but if you don’t look at that expense, Queen said, “You’re leaving a lot of money on the table.” The engineer said he knew of one large grower that saved $50,000 per year just by scheduling lights to run during off-peak hours, when rates are much lower. In general, growers considering an upgrade should: • Identify equipment upgrades ranging from lights to HVAC. • Create a model of potential energy savings and benefits, such as how much money would be saved, how plant cycles and yields would be affected, and the return on investment. • Collect bids and estimates from contractors. • Install the equipment and verify you’re getting the savings you expected. This can be done by simply monitoring your monthly energy bill and production yields. Eric Stern, co-founder of Cultivate Energy Optimization, said rebates and other incentives often are available from utilities. But, he cautioned, “every program is different, every utility is different.” While there are standard rebate options, “the right program is almost always a custom program.” Custom programs potentially can cover any piece of equipment that uses and saves energy: HVAC, lighting, fans, boilers, chillers, schedule optimizers, water heaters, water filtration systems. Growers that use a custom program need to lock in their rebates with a preapproval letter from utilities before they purchase new equipment, said Bob Macauley, trade relations manager with Xcel Energy in Colorado. One of the big problems is the lack of upfront capital for such improvements, said Mark Crowdis, president and founder of New Jersey-based AgCurrent, an energy- efficiency consulting firm. Look for ways to leverage your resources, such as by using third-party capital, said Crowdis, whose firm does some of that financing. If you’re a new cultivator, building efficiently from the outset is critical, said Michael Turner, director of commercial and industrial energy services at the Colorado Energy Office, a state agency. 3. SHARE BEST PRACTICES The reality is that cannabis is a relatively new industry, so it’s still finding its way in the world of energy conservation. “The big challenge is the industry is so nascent that we don’t know all the technologies” that could be used to make it more efficient, said Brad Smith, sustainability outreach specialist for Colorado’s Boulder County. “We don’t have national testing facilities evaluating lights, HVAC. … It puts cultivators in a challenging position,” he added. Smith said Boulder County is planning to assess marijuana cultivators in the area to try to determine how to best help them become more efficient. Derek Smith, executive director of Resource Innovation Institute, a nonprofit research organization in Portland, Oregon, spoke of the need for cultivators to share more data, so better regulatory policies and industry practices can be developed. “We need more baseline data,” he said. Now, “we kind of make it up.” Others at the sustainability symposium noted the need for cultivators to share best practices, although some fear giving away their competitive advantage. In the end, Smith said, “we have to figure out what’s the most efficient way to do cultivation.” And most likely, he added: “We’re going to figure that out by experimentation.” − Jeff Smith