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Monday Macro: Indoor Farming Projects Aimed At Saving Energy & Cash
In a period where companies are forced to save money and choosing more efficient equipments to decrease their cash burn rate.
Good morning readers, With the current economic downturn, many CEA growers are looking for ways to cut costs. A significant chunk of their expenses is providing heat, electricity, and lighting for their crops. As a result, various emerging projects aim to provide alternative solutions for growers to reduce their operational expenditure.
Some of these projects explore new energy sources, while others aim to offer alternative lighting solutions. By adopting these innovative solutions, growers can improve their profitability and thrive in these challenging times.
Below we review two case studies on the use of geothermal energy in CEA and the use of sun tubes as an alternative lighting solution.
The Use Of Geothermal Energy In CEA
Freshbay is making great strides in building a state-of-the-art controlled environment agriculture facility that will tremendously impact the region's economic growth. The facility will grow the Affinoria Fragaria strawberry exclusively. Utilizing geothermal energy makes this facility an environmentally friendly solution as it does not emit greenhouse gases, air pollutants, or toxic waste. Using cutting-edge technology such as vertical farming and greenhouses will ensure that the crops are of the highest quality and can be harvested throughout the year.
“Geothermal energy is genuine sustainability that can address the needs of heavy energy consumers such as indoor food producers. Freshbay is all in, and we plan on expanding aggressively throughout Western Canada. Northern British Columbia and Sturgeon County, Alberta are our next targets. Although we have heavy international demand, we plan on focusing on Canada for the near future.” commented Vic Reddy, CEO of Freshbay
The Freshbay CEA facility is set to be the first in North America, providing 450 new full-time jobs in the region. The company's experts in geothermal energy, agriculture, and indoor farming are committed to delivering a sustainable and economically viable solution to indoor agriculture. Despite the potential costs of drilling wells and constructing geothermal power plants, Freshbay remains steadfast in its commitment to harnessing the power of geothermal energy. The CEO believes that this project has the potential to revolutionize indoor farming and provide a unique and environmentally conscious solution to Canada's growing demand for local produce.
“I believe geothermal is the missing puzzle to Controlled Environment Agriculture(CEA). The access to energy, on demand, 24/7, is the differentiator between freshbay and other indoor producers. Heating, cooling, and electrical production are all energy intensive and costly these days. Geothermal not only allows us to minimize our energy costs but also to map our energy costs for the next decade and beyond. In comparison to solar and wind, geothermal is far superior, as it is available on demand, day or night, year after year. There is a higher upfront cost. However, the maintenance costs are pennies on the dollar in comparison to traditional heating, cooling, and electrical costs.” commented Vic Reddy, CEO of Freshbay
Geothermal energy is often touted as the most reliable renewable energy source due to its consistency, which overcomes the fluctuation issues found in other standard renewable energies such as solar or wind. According to Vic, the CEO of Freshbay, geothermal energy can provide a more stable power supply, especially for energy-intensive operations such as CEA facilities that require consistent energy supply. In comparison to traditional energy sources, the annual maintenance costs of geothermal energy are also reasonable. Although hydro is geographically limited, the growth of geothermal technology may soon overcome that issue. Furthermore, the drilling technology for geothermal energy is becoming more advanced, allowing for deeper drilling and opening up new regions of the world to this renewable energy source.
According to Vic, the installation costs of geothermal energy may be higher than other renewable energy sources. However, the operational cost savings are significant due to its low maintenance costs. With these factors combined, the economics of the Freshbay CEA facility is expected to be impressive. Vic believes their project will set a new standard for indoor food production, highlighting the benefits of geothermal energy. The cost-effectiveness of this solution makes it an attractive option for companies looking to reduce their carbon footprint while maintaining a sustainable and profitable business. Jeff Messner, an expert in regulatory matters, can provide more in-depth information on the regulatory aspects of implementing geothermal energy in commercial facilities.
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The Use Of Alternative Lighting Solutions To Lower Expenses.
One of the most significant challenges faced by CEA companies is lighting. Traditional lighting solutions often consume a significant amount of energy, resulting in higher energy costs and increased HVAC usage, which leads to higher operational expenses. The additional energy consumption also contributes to overheating, which can harm crops. Companies seek alternative solutions to decrease energy consumption and create a positive cash flow.
Fortunately, some companies like HyPAR have developed innovative solutions to address these issues. HyPAR's sun tubes offer an energy-efficient solution, consuming between 50-80% less energy than traditional lighting solutions, depending on the location and season. With HyPAR's solution, companies can reduce their energy costs and create a more sustainable environment, ultimately lowering operational expenses. By providing high-quality lighting at a reduced cost, companies can optimize their operations and increase profitability, making alternative lighting solutions a valuable investment for CEA companies.
Its CEO & founder, Chris Walker, commented, “ When the sun is shining, our technology uses that in lieu of artificial lighting. This is a geographical-specific question/answer as well. The closer the grower is to the equator, the more sun they have to work with, and the less artificial lighting they need to supplement. As an example, we are designing a grow in Phoenix, AZ, where they are aiming for a DLI of 35. We can expect to use the sun for 80% of that DLI.”
Chris also mentions that the sun tubes his company offers, pull the entire PAR range and sometimes offering a more intense blue and red light compared to other LED lighting solutions or natural greenhouse lighting. “To shoulder periods of low lights, we supplement our sun tubes with LEDs so that it does not affect the plant’s growth”
“The beauty of the sun tube technology is that it dramatically changes the heat load equation. A facility built correctly, with sufficient insulation values in the walls and roof, will also enjoy the low heat transfer of the sun tubes. We estimate that the tubes release approximately 5% of the heat that a greenhouse would experience. So less HVAC, less dehumidification, less A/C...” Commented Chris Walker, CEO & founder of HyPAR
“LED lighting has only recently become the preferred choice for growers, but some still opt for less expensive, lower-quality LEDs or HID/HPS lighting to save on capital expenditure (CapEX). However, as the former General Manager of Heliospectra, I always encouraged the company to see themselves as a lighting partner, offering additional services such as installation management and a dedicated grower liaison. At HyPAR, we adopt the same philosophy, designing our business with the grower in mind as the most important person in the customer's camp. One significant benefit of our technology is the extended lifespan of the LED lights used to supplement our sun tubes. While LEDs typically last 8-10 years, we expect our lamps to last at least 25-30 years, providing long-term savings to our customers. By prioritizing the grower and offering superior technology, we hope to become the go-to lighting partner for controlled environment agriculture.” added Chris
Nonetheless, on a side note, Chris regrets the lack of due diligence on behalf of growers when choosing equipment as most of the time, they realize their decision once its too late. “It is typically an after thought. It is only once the grower is not getting the results they need to make their economics work that they turn to the expertise that lighting companies can provide. The use of far red is a great example of this. Growers are supplementing with far red these days but their grows typically were not built with these spectrums.”