Chart of the Week: 72% Increase in Energy Use By Denver Marijuana Cultivation Sites Since 2012

By Becky Olson

The marijuana industry has boomed in Denver over the past few years, and energy consumption by cannabis cultivators has soared in lockstep along the way.

Power use by commercial marijuana growing sites in the city surged an estimated 72% from 2012 to 2014, according to data obtained from Xcel Energy by city officials.

The increase reflects the rapid expansion of the state’s medical marijuana industry in 2013 and the emergence of recreational cannabis businesses in 2014, which led to a sizable spike in cultivation activity.

To put the numbers in perspective, the rise in power use by cultivators from 2012 to 2014 accounted for roughly half of Denver’s overall increase in energy consumption during that period – with the rest attributed to population growth, according to city officials.

Cannabis cultivation sites served by Xcel Energy in all of Colorado used about 200 million kilowatt-hours last year, or about a half a percent to 1% of the utility company’s total electric revenues in the state, city officials said.

An Xcel representative confirmed the vast majority of the company’s marijuana cultivation customers are located in Denver.

The industry’s heavy energy requirements are increasingly a concern for government and utility officials. Denver has an energy efficiency plan for the city that aims to cap consumption at 2012 levels – a goal that many are worried is in jeopardy specifically because of the marijuana industry.

Some local municipalities have taken matters into their own hands to combat higher burdens on their power grids. Boulder County, for instance, started levying a tax on cultivators last year of $2.16 per kilowatt hour.

In other cases, utility companies in states with legal marijuana have taken action to either help cultivators design or retro-fit energy efficient operations, or provide rebates as incentives for the companies to do so on their own.

However, seemingly mundane efforts – such as offering energy rebates – have already hamstrung some publicly funded utility companies that have expressed concerns over losing federal funding for working with these state-legal businesses.

While exact figures of energy use by marijuana cultivators in a given market can be difficult to pin down and track, the existing evidence is certainly enough to warrant concern over future energy requirements and how to meet the industry’s needs in a responsible manner.

There is a growing sentiment within the industry that environmentally safe and energy efficient cultivation practices are non-starters. Businesses that are making the investment in efficient technology today will have a long-term competitive advantage over those who ignore this writing on the wall.

 Becky Olson can be reached at [email protected]

9 comments on “Chart of the Week: 72% Increase in Energy Use By Denver Marijuana Cultivation Sites Since 2012
  1. Rob on

    I find it interesting that businesses that derive revenue from selling cannabis are still taxed unfairly by 280e, but a business such as the energy company who provides the power to grow the same cannabis is taxed at standard rates, even though they are complicit in their knowledge about what their customer is using the power for. There is no plausible deniability for these companies. There engineers go to the cultivations and discuss what their power requirements are and then build a panel around the energy needs. How is it that they are provided preferential treatment. I feel the same was about GW Pharma and Insys. Why are they not taxed in the same manner as a CO or WA dispensary. These are clear examples of a double standard by the Feds and it should provide a legitimate reason to challenge 280e.

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  2. David Clark on

    The energy consumption can be cut by at least 50% by switching from outdated lighting systems! I have been growing for 2 years and have pics to prove this! No change in Quality or amount of yield!

    Reply
  3. Stephen Jensen on

    The future of cannabis cultivation is going in only one direction here in WA…greenhouse. Current wholesale prices only support sun grown cannabis at $2-$3 per gram. It will be a blood bath for indoor grows in the next 12 months with costs starting in $4-$5 range. On the plus side, a sustainable, solar powered industry outcome is a win for both consumers and the environment.

    Reply
  4. peter aldworth on

    The industry has come a long way in a short time, and it’s time to take the next step and become energy efficient with LED grow lights. Made in the USA by American workers, LED’s use up to 50% less power and last up to 100,000 hours.
    You’ll get ROI in 2 years and save more than $2M over 5 years in a 20,000 sq.ft.grow. David’s right. Better yield and quality

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    • David Clark on

      Leds are the ultimate! Although pricey at first, The pay back takes only a short time! I have also had great success with 6 bulb, 4 ft t- 5s for indoor small grows!

      Reply
  5. Vin Maru on

    Yes, energy costs and source will be issue going forwards. Commercial growers should not have to pay a higher rate than any local business. If so, they should look at alternative ways of saving energy or going off the grid for most of their energy needs. We offer several solutions to reduce energy usage and save on energy costs from local utility companies, contact us for more details.

    Reply
  6. mark m. on

    So to put this in perspective… a 2MW data center (tiny) uses roughly 17.5 billion KwH per year. The headline grabbed me until I did the actual math vs. the industry I come from.

    People trying to levy taxes against cultivators vs data centers are going after the wrong group of people if they are TRULY concerned about usage.

    The 72% increase of a business type that as a whole makes up such a small percentage of electricity use is like putting a couple drops of blue food coloring in the Red Sea and getting pissed off it didn’t turn purple. The politicians and utility officials must get downright frightened when someone plugs a string of Christmas lights in in August too.

    My point is perspective – the data centers in Denver alone I would guess draw 10,000 TIMES the electricity every day to power computers. The growers using 1/10,000th of the same resource and being the ones everyone is concerned about seems a little far fetched…

    Reply
  7. Wade Slomski on

    It has been increasing or accelerating virtually every single week, for the past 18 weeks; and especially during the most recent, most relevant ones. With or without calculating for acceleration, and whether you look at recent weeks or go all the way back to the start of his campaign, these polls strongly suggest that Bernie’s popularity will surpass Hillary’s – and will do so months before the first primaries even start.

    Reply

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