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]