Distributed power generation and commercial cannabis cultivation

Since that thread on big tobacco possibly moving in to CO, I've been thinking of how I would do it if I were them. We all know the primary cost of growing cannabis year around in non-equatorial regions.... that would be the price of power. If any of you are familiar with the big hothouse tomato operation North of Denver, you will understand where I'm going with this.

If I had deep pockets, I would purchase a smallish natural gas turbine ( kind of like a jet engine off a commercial jet, just set on pedestals and coupled to a generator to produce power). These are becoming popular as more and more business are going to cogeneration models (I.e. they produce their own power and sell surplus back to Utility companies) as the cost of natural gas is ridiculously cheap currently. The exhaust gas off the turbine does need to be cleaned up somewhat (NOx and SOx emissions... But the one emission everyone is worried about in regards to global warming would be consumed onsite, that being CO2. Unfortunately, I know a bit about CO2 capture from exhaust gases... It ain't so easy to remove in a usable form with current technology, but it is possible, and the tech is gaining ground quickly.

So, anyone interested in investing? I figure we will only need to scrape up $30 million or so. Here's a cartoon schematic of a typical system. The bit on CO2 capture and routing to the plants cracks me up a bit though, they make it look easy lol.

I got 5 on it!

With that business plan, you will for sure get venture cap! The diagram alone sells this model!

chewberto said:

With that business plan, you will for sure get venture cap! The diagram alone sells this model!

Click to expand...

Only if Feds give state a pass on CSA of 1970, otherwise they could seize your equipment, too much risk for most any venture capitalist currently.

Was bored today and jonesin for nicotine ( on my 6th day..) so I decided to take a better look at my wag estimate for this set-up. Turns out you can buy small natural gas turbine gensets (I.e. fancy for generator that runs efficiently on natural gas ). There is already a flourishing market. The only hard numbers I could find was a study from 2003 (actually an industry report so probably accurate though dated) which showed an installed 4.2 megawatt NG turbine genset cost of 2.3 Mil. Typically I would escalate this price as the # is 10years old, but I bet you can get something similar for same cost today as the market has really expanded.

I calculated the power requirements for an acre greenhouse and it came up to around 3MW. I don't have a feel for the installed cost of a 1 acre greenhouse (or conglomeration of smaller structures connected by underground ducts), but my guess is you could build it for $90/sqft, so $4Mil for the building and another $1Mil for lights (in the neighborhood of (4,000) 600watt units, etc.)

Call it $8mil. My wags are usually closer than this so I felt compelled to fess up.

I figure the setup would produce 2 tons (4,000lbs) every 3 months. no clue as to what that would be worth vs capital and operating expenses. If I'm jonesin tomorrow maybe I'll cypher on it a bit. If ya'll want to pick apart the backup to them numbers I'm throwing around, let me know and I'll post it in all its glorious, boring and neurotic detail

Another nice feature of this set-up is that you sell power back to the grid when the grow lights aren't on or the sun is crankin. I'll figure that benefit analysis some other time but I bet it is significant.

I love the idea Bub,
with your estimates of 2 tons every 3 months your looking at roughly possibly 6 mil (@ 1500/lbs.) but Im thinking its probably gonna be more like 1k/lbs. still bringing in approx. 1.3 mil per month. The only problem I see with it is the supply and demand. How can someone accurately forecast the amount that can be sustainable within the state since there can not be any of that product shipped out of state at the current time. It seems like the longer you produce those number the more of a surplus you would wind up with in the log run.

Yeah, definitely would start to pile up lol. Really the whole mind exercise was what I would do if I were big tobacco and the Feds gave a waiver, so I was kind of assuming unlimited national demand. Thanks for the point, I really hadn't thought about it from that angle yet, but single state demand would be a key component to a complete business plan.... and it would be the most subjective and toughest to estimate... and hardest to defend with the analysts.

I suppose you could scale it down, but I think 3 MW is about the smallest NG turbine genset available. Otherwise, you are using some kind of reciprocating engine which is less efficient and requires more maintenance.

I just installed 2 cogeneration plants and finishing project now. The only reason why cogeneration has a cost savings is because the by product is hot water. Without a system to use hot water to heat and also using an absorption chiller to transform the hot water to cold for a/c.
These are great ideas. But a real pain in the ass to get to work properly.

Canna Connoiseur said:

I just installed 2 cogeneration plants and finishing project now. The only reason why cogeneration has a cost savings is because the by product is hot water. Without a system to use hot water to heat and also using an absorption chiller to transform the hot water to cold for a/c.
These are great ideas. But a real pain in the ass to get to work properly.

Click to expand...

True, it's a complicated system, but with nat gas @ $3/GJ, I think it would pencil out well. I don't typically work with the cogen type gensets, so I bow to your wisdom, but I do have experience with large utility gas turbine combined cycle facilities in the 500 to 1,000 MW range, so I understand the challenges with converting the waste heat to steam or hot water, while keeping your boiler feed water in a closed loop and all the other ancillary equipment, etc.

I didn't say it was easy lol, just doable. Out of curiosity were the cogens that you installed NG turbines or diesel generators? Also, since you're in the business, have you ever heard of this outfit?

http://www.cai3.com/3mwindex.html

They claim to have a 3MW genset that would be just the ticket if it were reliable.

i am very interested in this jiberish. i get whats going on here i am jonesing for some bud now(had to quit buying to build my grow or my old lady would kill me) and i think this thread is just what america needs more of people with the minds to make it happen. not the money to buyout less fortunate. i mean i have like ten bucks if that helps? keep it coming you guys are giving me crazy thoughts and a nice smile.

Thanks for the kind words Bob. This is just an academic exercise at the moment, but if say 30 or so old hippies that bought Apple shares early and happen to have 250K to invest send me PMs, it could turn real in a hurry lol. I could build this thing, it sure would be nice to get away from my current industry.

Anyway, I took a swing at calculating operating costs (with maintenance) for the genset. Looks like about $14K per day, or $1.3Mil for a grow period. That takes a healthy bite out of BadAndy's estimate for revenue ($1.3Mil per month or 3.9Mil for the full grow period).

These numbers are all based on theoretical estimates (except base yield per watt data which I took from Rosenthal's book). Having said that, it has a ring of truth. So energy cost will be 33% of Revenue, probably need another 33% for staff and consumables, leaves you with a 33% margin. That's probably right on the edge to get funding for a risky venture...

Well if you distributed concentrates and hash products as well as create an efficient kitchen to produce and store edibles, the surplus would be turned into something that can be stored and sold long term..but to start out so big could be a huge risk for sure without knowing future demand; also on such a grand scale it may be hard to maintain a quality that is consistently sought after...I agree with Andy...

Thanks Chewberto. Y'all are bringing me around

So, I still think it would still be cost effective to buy the 3 MW genset and build a central facility where it is entrained, along with a commercial kitchen, nice call. Then on the greenhouse side, you could add greenhouse modules (say each module would be 1/10 of an acre) as demand rose. Probably the Quonset type would be most cost effective. I would go ahead and stub up hot water heating supply and return lines and electrical at each future greenhouse module site though as it would be most cost effective during original construction. The key here is if you could count on selling the surplus power at breakeven or with a profit much of that would depend on negotiating a reasonable long term gas purchase contract to keep from paying retail for fuel. (Or you could keep a few thousand pigs and draw the methane off the poo as the genset will run on methane also. Not my favorite scenario.... Imagine the aroma cross between super skunk and pig shit at the facility.... :shudders

When I first started thinking about it, I knew a 1 acre greenhouse would be wildly inefficient just from its size alone. I bet you could get the same square footage with modular pieces for less than $90/ sqft and have an efficiency gain on energy consumption.

One things for sure in my mind, I am a firm believer that we will all underestimate the demand for recreational herb right out of the gate. I also firmly believe that demand will grow steadily year over year as folks realize the sky ain't fallin.

I appreciate all the comments. I may actually put a business plan together based on what comes out of the state for regulation.... and the rat bastard Feds.

Bubbagineer said:

Canna Connoiseur said:

I just installed 2 cogeneration plants and finishing project now. The only reason why cogeneration has a cost savings is because the by product is hot water. Without a system to use hot water to heat and also using an absorption chiller to transform the hot water to cold for a/c.
These are great ideas. But a real pain in the ass to get to work properly.

Click to expand...

True, it's a complicated system, but with nat gas @ $3/GJ, I think it would pencil out well. I don't typically work with the cogen type gensets, so I bow to your wisdom, but I do have experience with large utility gas turbine combined cycle facilities in the 500 to 1,000 MW range, so I understand the challenges with converting the waste heat to steam or hot water, while keeping your boiler feed water in a closed loop and all the other ancillary equipment, etc.

I didn't say it was easy lol, just doable. Out of curiosity were the cogens that you installed NG turbines or diesel generators? Also, since you're in the business, have you ever heard of this outfit?

http://www.cai3.com/3mwindex.html

They claim to have a 3MW genset that would be just the ticket if it were reliable.

Click to expand...

Natural gas. These units came from europe. A big cogen company out there decided usa was a good place to head next. The ones that we installed only produce 160kw an hour but are pretty small units and the campus cannot use any higher.
I was looking at that unit. It seems like a good idea. And it also looks like you can have a heat exchanger to heat up a domestic water or some other options.
Only problem I see is is that nowhere do I see any specs on electrical output?
How many kw/h does the unit you may use pump out? How big is the space and what is the electrical demand of the space?

Exactly! Lol I was hopin someone would ask me that. Btw, I took a day of vacation today, goin to the museum with my 1st grader, its gonna be a blast, but no high CBD relief for me this morning, I went straight to the Chemdog..... So be warned I can ramble somewhat.


I got a cool app for this iPad called Quickcalc or something... Anyway it lets me keep running notes alongside the calculator. So here is my rambling thought process that got me to the numbers I was throwing around. I'm an mechanical rather than electrical kinda guy, so feel free to help me with incorrect units, etc. I know my estimate is soft on the daily fuel demand, but I bet it's in ballpark.


But before I get to that I wanted to talk a bit about a thought I had on employee structure for the venture. I have always felt that employee owned companies work best at a reasonable scale. If this project would happen, I would hope that a bond could be set with the investors such that the employees could pay it off thereby buying into their shares. Then we all get fucking rich doing what we like to do. Just sayin, but I'm no finance geek either.... I bet some of you guys are out there, what say you?

Now here's the ramble


From Mr. Rosenthal's book:
- (1)16'x16' (256 sqft) room needs 16 Kilowatts for lights.
- Yield of 56g per plant. The room had (8 - 4'x8' tables. Looks like each table has 24 plants (conservatism cause from picture I think he actually has 32 plants per table). So total harvest for room is 24 pounds.


- Assume lights constitute 90% of total power consumption as heating the space will be a byproduct of combustion. Maybe closed loop district steam heating scenario for multiple smaller greenhouses.


Doodle for a 1 acre greenhouse, assume no benefits from natural sunlight, which will not be the case and is just another built-in conservatisim in this estimate.


- 1 acre = 43560 sqft
- Total Power for 1 Acre Greenhouse =>


Power= (43,650 sqft/256 sqft)x(16 KW)= 2,728 KW.


Call it a 3 MW generator.


4,200-kW Solar Mercury 50 combustion turbine (4.2 MW) NG turbine/generator installed cost $2.3Mil in 2001(per 2003 EPRI study) estimated escalation to present day $ is prob $3Mil, but expanding mareket might offset. In 2003 estimated cost per kwh for operation (including maintenance and replacement power costs)was $546/KW, but nat gas prices have dropped precipitously since 2001.


1 GJ is about 278 kWh.


To get 1MWhrs at a typical utility gas turbine combined cycle (GTCC) plant, you need 7 GJ of NG due to 58% efficiency rate (which is about 70 therm or 70x100000 BRU). 58% is probably towards the high end of scale. A small turbine genset may not be as efficient?


1 GJ of NG currently costs about $3.


So, assume 10 GJ/MW to be conservative since it will be simple cycle as steam will be used as heat & cool rather than adding power by running through steam turbine.


Current fuel cost per MW of generation = $3/GJ x 10 GJ/MW x 4.2MW =$126/MWhr.
But have maintenance, etc. so look more at how much gas prices have fallen since 2001 and compare to EPRI $/MW operating cost. Looking at charts, my guess is EPRI was estimating gas to be at least $6/GJ. So the $546/MW has probably worked out to be more like $275/MWhr. So one day of generation costs = $275/MWhr x 3 MW = $825/hr x 24 hrs ~ $20K per day. But will sell back probably 30% of power. Assume a breakeven on power sale though there would likely be a profit (another conservatism).


So, $14K per day to operate turbine or $420K / mo. Or $1.3Mil for the grow period.




Bubba

Or you could buy one of these 1.5 MW ones from Kawasaki I'm calling for a quote on Monday lol. The spec sheet showed data for lbs of steam per hour, so when I get up the gumption, I'll figure out how much steam would be needed at each of the separate greenhouse modules. Sounds like a pain. Do we have any steam guys in the house? I'm now lookin at (16) commercial greenhouses to give the acre grow space. Each one is 28' x 96'.




Or are you guys tired of hearin me go on about this?

found it....

bump for reasons

yeah what would you do with 2 tons of weed every 3 months? i know i damn sure couldn't move it..especially if you are planning to keep it all in-state. afaik colorado's demand isn't higher than the supply, and to compete you'd have to be producing high-quality herb.

this is cool stuff to play around with though. if i had the knowledge you do then i'm sure i'd find myself doing the same thing. who knows..maybe one day you'll work out enough kinks to make this realistic.

seriously though, have you put any thought into how you would move such a large amount of product?

Bubbagineer said:

Or are you guys tired of hearin me go on about this?

Click to expand...

definitely not! continue on, please!

Keep it rolling Bubba, I'm loving the lateral thinking, we often forget the” laterals”..

It's ideas like these that keep technology moving forward rapidly.
I wanna hear moarr...