Features Business Cultivation Production
What’s powering the lights?

Among the wide array of variables and operational goals integral to successful commercial cannabis production is energy efficiency. While once an overlooked factor, its impact on navigating market shifts, optimizing production demands, and increasing overall profits has companies placing an increased focus on managing energy inputs as the industry progresses.

Expanding priorities and profits

Nadia Sabeh, CEO of Dr. Greenhouse — an agricultural engineering firm with a focus on growing facilities — has witnessed firsthand this shift towards an increased focus on energy efficiency and its driving influences.

“When I started Dr. Greenhouse almost six years ago, energy was almost always at the bottom of the list [of client priorities],” she says. “Now what we’re seeing is that it’s almost always third or fourth place, and I think that’s a really good trend for the industry as a whole.”

Energy efficiency’s growing role in facility designs and processes, Sabeh believes, comes partially from the opportunity it offers companies to increase profits in an industry marked by turbulent fluctuations in competition, costs, and pressures to maximize production outputs.

“When it comes to cannabis, we often hear these conversations about the race to the bottom: that prices are dropping, and that there’s more supply than there is demand. The kneejerk reaction by a lot of investors and owners is to grow more.”

The yield from this increased production remains vulnerable to further price drops, instilling in companies a need to create balance between the decrease in retail price and the increase in production costs by maximizing profits in other areas. Among the most recognizable of solutions that may satisfy the need for profitincrease, Sabeh believes, is through the optimization of onsite energy efficiency.

“I think that’s one of the reasons why energy is floating to the top, is that growers, investors, and owners are asking themselves how to reduce the cost of production, with energy being that biggest piece,” says Sabeh.

An energetic shift across Canada’s industry

Strengthening relationships between operations and energy efficiency becomes more necessary when considering the unique circumstances faced by Canada’s industry. For the majority of its lifespan, production has occurred under pandemic-influenced markets and the resulting nonstandard energy rates, meaning a number of adaptations are needed as the industry returns to a new normal.

“In Canada, we were provided rebates along with off-peak times, provisions, and less costs overall,” relays Brigitte Simons, CEO of Niagara Region’s Safari Flower. This has left companies with a history of data and expectations regarding energy usage that is statistically incompatible with current rates and market trends.

Simons estimated that producers across the country are set to see a 70 per cent increase in operational costs heading into the 2023 fiscal year as energy costs shoot upward post-pandemic — a reality that she believes many are unaware of or ill-equipped to deal with.

“Looking at it in 2022 and then looking back, there aren’t enough cycles of consistency where you could have actually made that decision on how much the cost per gram is,” says Simons. “So, now we’re faced with the realities of what is truly the cost of energy to produce cannabis in these facilities, and what we are seeing is that it is alarmingly increasing.”

Data: the doorway to efficiency

The key to curbing these impending hardships while fully optimizing energy use, Simons believes, is a robust data collection system: “I would say, as of   today, that data is more powerful than the technology we have that builds and moderates energy.”

To fully unlock data’s ability to increase efficiency, Simons recommends simplicity and consistency. The changing, around-the-clock demands of energy in cannabis, including the seasonality of growing, peak and off-peak rate changes, and multiple meters within a single operation creates a large number of variables, and with them, a wider margin for error in data collection.

For navigating these factors and their fluctuations, Safari has developed their facility to operate on a single-source power supply. Among other benefits, this streamlines the number of variables when it comes to tracking data on operational costs and energy outputs, thus increasing the clarity and utility of the information collected.

“Data is powerful when it’s accurate,” Simons states. “If you can move to a single energy source and you know how much it takes to run all of the equipment, such as HVAC, boilers, chillers, co-generators, and air handling units, that data now gets to be more valuable than the actual acquisition of the energy molecule itself.”

Design for energy success

The increased need for Canadian cannabis producers to focus on energy is furthered by the facilities these companies own, many of which were not outfitted with the appropriate designs and equipment for producing quality cannabis in energy efficient ways around the time of legalization.

Many companies, according to Adam Clarke, CEO of Stratus Designs, “were behind before they even started from an energy production standpoint.” The issue within their facility design, is “too many engineers treated it like a commercial building  rather than an industrial building. You can’t use commercial grade equipment because it will break, it costs more to operate, and it doesn’t last as long.”

The number of facilities across Canada impacted by these design misunderstandings, and the ensuing energy obstacles, is widespread. Clarke estimates the number of buildings unaffected to only be between five and 20 per cent. The integral role of facility design in energy efficiency means that companies may be struggling not only to adapt to increasing rates, but also to create quality product and make profit.

“Cannabis buildings have to grow cannabis to make money; without good quality cannabis, you don’t make money,” says Clarke. “So, what’s the most important thing for a company? Grow quality cannabis. What makes quality cannabis? Having a properly designed HVAC system that maintains the temperature, humidity, and all other conditions in that space.”

Clarke adds that facilities must review their energy sources, offering an alternative perspective whereby redundancy is key. “Often energy costs different amounts at different times and using gas at one time and electric at another could be more efficient.” Clarke believes redundancy acts as a buffer where if one system  fails, another is available, therefore “back-up generators should be on a different energy source than the base building,” he says.

Streamlining through automation

For those with efficiency gaps in their own energy systems, Clarke recommends considering equipping facilities with automated energy management systems, which grant growers total control over many variables present on a grow site and the ability to optimize their energy usage right from their phone screen.

“The lowest hanging fruit for someone who, right now, wants to become more efficient while at the same time save money on power and increase the ability to fine tune their crop in order to increase yield, is to do automation,” affirms Clarke.

Clarke explains that using automation, “any of the processes we run, I can implement anything my clients allow me to do while on my phone from anywhere in the world.” The benefits of this solution, he says, not only allows for more precise room conditions and grows, but also, through the data these systems collect, illustrate specific trends and the solutions needed to decrease overall energy levels.

Optimal energy efficiency starts at the facility level, and an automation system, unifying the array of onsite equipment for maximum control, provides companies with the best defense for rising rates and market fluctuations, Clarke believes.

“Realistically, the single biggest savings you can have in growing cannabis is properly designed HVAC, and even more importantly, properly designed refrigeration, in conjunction with a robust building automation system to make sure everything is functioning as intended,” he concludes. 

Jack Burton is a freelance writer in Toronto.