Canadian greenhouse growers are facing competition on all sides, says David Arkell, CEO of 360 Energy. He recently spoke with growers attending the 2018 Canadian Greenhouse Conference, sharing insights into how managing energy costs will be key to remaining competitive:
Growers can reduce their electricity prices in Ontario.
Small growers can pay 3 times as much for their electricity as growers that qualify for Class A rates. Additionally, greenhouse operations in Ontario that use their farm classification properly can receive a rebate from the provincial government. These examples show how energy prices can vary significantly within a jurisdiction. By knowing rates and regulations, growers can save a lot on their energy costs.
Growers can share solutions to address neighbourhood electricity grid constraints.
The cannabis industry is growing quickly into one of the largest greenhouse crops in Canada. There are now over 11 million ft² under production. Cannabis is also extremely energy-intensive. It takes ~2,000 kWh of energy to grow a pound of cannabis. If a cannabis cultivation facility is setting up shop, their energy capacity may restrict the ability of others in the neighbourhood to increase their energy usage. This strain on local infrastructure is not just a cannabis issue and can be caused by the arrival or expansion of any large energy user.
Greenhouses with expansion plans in already-constrained grids can work with other existing or prospective large energy users and the local utility to share the cost of improving neighbourhood infrastructure.
Growers can consider on-site self generation options.
The question 360 Energy is most often asked by greenhouse operators is, “What are growers paying in other regions?” Growers everywhere pay not only the cost of power, they also pay transmission and distribution charges:
- North American grids are being forced to modernize. Rates will go up so utilities can earn a regulated rate of return on these transmission and distribution upgrades.
- With the pending implementation of the federal carbon pricing backstop on January 1, 2019, growers across Canada will be paying for the emissions associated with their natural gas, coal and diesel usage. Similarly, growers in California also pay for emissions through the state’s Cap and Trade program.
- The increase in carbon, transmission and distribution costs will further incent distributed generation. Costs for renewable energy are dropping and technologies are improving. More growers are assessing the potential for on-site self-generation.
David Arkell advised the greenhouse operators that, in order to remain competitive, they need to be familiar with 4 important energy facts:
- Know how much electricity, natural gas and water they are consuming in their operations as well as how much CO₂ they are emitting as a by-product.
- Understand all the components on their energy bill, not just the amount owed. Understand what rate options are available to them.
- Learn the pros and cons of applying on-site generation technologies to service their particular energy needs.
- Learn how to read future market forecasts and apply them to their energy use profile.