As pot-growing expands, electricity demands tax grids
Pot’s not green.
The $3.5 billion U.S. cannabis market is emerging as one of the nation’s most power-hungry industries, with the 24-hour demands of thousands of indoor growing sites taxing aging electricity grids and unraveling hard-earned gains in energy conservation.
Without design standards or efficient equipment, the facilities in the 23 states where marijuana is legal are responsible for greenhouse-gas emissions almost equal to those of every car, home and business in New Hampshire. While reams of regulations cover everything from tracking individual plants to package labeling to advertising, they lack requirements to reduce energy waste.
Some operations have blown out transformers, resulting in fires. Others rely on pollution-belching diesel generators to avoid hooking into the grid. And demand could intensify in 2017 if advocates succeed in legalizing the drug for recreational use in several states, including California and Nevada. State regulators are grappling with how to address the growth, said Pennsylvania Public Utility Commissioner Pam Witmer.
“We are at the edge of this,” Witmer said. “We are looking all across the country for examples and best practices.”
The corporatization of what was once off-the-grid narco-agriculture is taxing electrical systems even as the nation prepares to comply with the Paris climate accord and the Environmental Protection Agency tries to reduce greenhouse gases from coal-fired power plants, which is considered the single largest domestic source of emissions that create global warming.
“Consumers seeking a green lifestyle are likely unaware that their cannabis use could cancel out their otherwise low-carbon footprint,” Evan Mills, a senior scientist for California’s Lawrence Berkeley National Laboratory, wrote in an email.
Indoor growing operations in 2012 racked up at least $6 billion a year in energy costs, compared with $1 billion for pharmaceutical companies, Mills found in a seminal study he did independent of the research institution. Some larger facilities today suck down as much as $1 million in power a month.
ArcView, a research firm, estimates the retail and wholesale marijuana market will reach $4.4 billion in 2016.
Cultivation operations from California beach cities to Denver’s warehouse district to District of Columbia closets are waiting months for new infrastructure to bring them power. Planners predict the escalating consumption could in some regions undo Americans’ attempts to save energy by buying more efficient refrigerators, washers and hair dryers.
With the industry just coming out of the shadows, utilities are without data to forecast its electrical needs.
“We don’t have aggregated energy audits from hundreds of grow operations that show us an energy footprint,” said John Morris, director of policy and regulatory affairs at CLEAResult, an Austin, Texas-based consultancy that works with growers and utilities. “We have utilities in the Northwest putting in new transformer substations to meet the load. Producers are having to go out and build infrastructure.”
In Colorado, more than 1,234 licensed grow facilities compose almost half of new demand for power. In 2014, two years after residents voted to legalize the drug for recreational use, growing sites consumed as much power as 35,000 households.
In California, indoor production consumed 9 percent of household electricity in the nation’s oldest legal medical pot market, the amount used in 1 million homes, Mills found. That study was published before the industry exploded after legalization in almost half the states and District of Columbia.
In a visit this month to a Denver warehouse, growers wore sunglasses as they checked on 150 top-heavy flowering plants. The four-foot-tall bushes were flourishing under dozens of 1,000-watt bulbs.
“All these things consume too much power,” said Paul Isenbergh, a commercial real estate broker and co-owner of the 3,100-square-foot medical-marijuana operation called Sense of Healing. He gestured at equipment surrounding varieties with names like Grape Crush. “The air conditioning, the lighting, the fans, the scrubber, the humidifier.”
The atmosphere is calibrated to mimic outdoor conditions to allow growers to reap multiple harvests a year. In an unvirtuous cycle, the intense heat from the lights requires air conditioning and fans to keep grow rooms at 75 degrees, a dehumidifier to prevent mold and a carbon-dioxide injection system. The electric bill for all this: as much as $5,000 a month.
Electricity represents as much as 50 percent of an operator’s overhead, yet profits far outweigh costs, with a pound of medical marijuana fetching about $2,500 on the wholesale market, Isenbergh said. His costs to raise the weed from clippings are only $600 a pound.
Some cities where growing operations are legal have seen power consumption soar as communities nearby made gains in meeting conservation goals. The disparity prompted several municipalities to tax growers who strain the grid.
In Boulder County, Colorado, commissioners levied an energy-usage fee on such facilities after discovering that a 5,000-square-foot operation consumed 29,000 kilowatt hours a month, about five times more than a typical commercial use.