As cannabis industry grows, tensions rise over energy use

Energy use is a lightning rod for conflict between the old and new economies.


In the Santiam Canyon, 30 miles southeast of Salem, Rob Freres, executive vice president of Freres Lumber, was recently worried there wouldn’t be enough power available to run a new manufacturing plant the company planned to build.

PacifiCorp, the local utility, was maxed out on the amount of generation it could provide in the area.

Part of the increased demand for electricity is from new energy-intensive marijuana grow operations. Population growth and industrial expansion from the wood products sector also put pressure on the system.

Freres, who has worked for his family’s lumber company for decades, said he is “seriously concerned” that the energy marijuana growers consume could potentially restrict future growth of his business.

“It is an electricity devouring” industry, said Freres of marijuana production.

In the end, PacifiCorp increased generation capacity in the Santiam Canyon to meet the increased demand. Freres Lumber’s plant got built and Rob Freres expects the new facility to be operational by year end.

The incident highlights a tension that is starting to exist between legacy industries, such as the wood products sector, which have operated in rural areas of Oregon since the turn of the century, and new economy businesses, such as marijuana producers, which only became legal in the past couple of years.

In this case, energy use is a lightning rod for conflict between the old and new economies.

It is not just marijuana producers facing scrutiny for heavy energy use.

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In January this year, Prineville made news when the central Oregon city risked losing a manufacturing company that was interested in setting up shop there. The reason was a lack of enough generation at the time to run the planned facility.

The crunch was the result of two nearby energy-intensive data centers owned by Facebook and Apple, which had maxed out capacity provided by the Bonneville Power Administration.

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As a new economy sector, marijuana faces extra scrutiny because of opposition from conservative business owners. Freres dislikes the industry, claiming cannabis use “eliminates peoples’ ambitions” and causes safety risks on the road from drivers under the influence.

Marijuana producers could do more to mitigate their reputation as an energy hog, say experts. Many indoor cannabis operators do not use LED lighting, for example, which can reduce electricity bills by 35%.

Indoor growers are still using high intensity discharge lamps for up to 24 hours a day operating all year, according to research by the Northwest Power Conservation Council. 

PacifiCorp estimates grow operations will add 20MW of power demand on the grid it manages by 2021. “That is roughly equivalent to adding a town the size of Stayton to the grid,” said Tom Gauntt, PacifiCorp spokesman. “So significant, but nothing we can’t plan for.”

Energy efficiency experts are working to establish best practices for marijuana producers’ energy and water use. A nonprofit, the Resource Innovation Institute, was launched in 2016 to promote energy and water conservation in the cannabis industry.

John Morris, vice president of D+R International, an energy efficiency consultancy, and founder of the Resource Innovation Institute, said the fact there are few studies showing the benefits of LED lighting in the cannabis industry could account for the low uptake of energy efficient lighting in the sector.

Typically, funding for this research would come from federal agencies, such as the Environmental Protection Agency. This type of research has been restricted because cannabis is illegal at the federal level.

This is the reason that the Bonneville Power Administration, a federal agency providing electricity distribution throughout the state, is unable to provide energy efficiency incentives to cannabis growers.

Morris’s organization plans to create a horticultural certification for LED lighting and water use. He encourages more collaboration between utilities and cannabis producers over energy use.

“Growers should see utilities as true partners to make them more sustainable long term,” said Morris.

  

  

   

    

Kim Moore

Kim Moore is the research editor for Oregon Business magazine.

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1 comment

  • Bob
    Bob Wednesday, 14 June 2017 20:00 Comment Link

    Generation is not the limiting factor here or in the case of Prineville. The limiting factor is the capacity of the transmission lines.

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