The Role of a Rebounding CEA Industry in Enhancing Grid Stability
While many venture-backed CEAs have faced financial challenges, the industry possesses a highly skilled workforce positioned to drive the next wave of innovation. As we look to future opportunities, one clear avenue is the integration of cogeneration systems—a technology that can provide both operational efficiency and additional revenue streams, while contributing to the resilience of the local power grid.
A Renewable Future Demands Flexible, Dispatchable Power
The increasing reliance on renewable energy sources, such as wind and solar, comes with inherent intermittency due to weather and seasonal fluctuations. To ensure grid stability, it’s critical to deploy flexible backup power sources that can be quickly ramped up or down. These sources, collectively referred to as Distributed Dispatchable Resources (DDRs), include:
While cogeneration (CHP) does not directly qualify as a renewable energy source, it plays a critical role in reducing carbon emissions and improving energy efficiency, making it a viable component of a clean energy future.
State-Level Incentives for DDRs
State energy agencies, including the New York State Independent System Operator (NYISO), are actively incentivizing the deployment of DDRs to bolster grid resilience. These incentives provide opportunities for CEA operators to invest in cogeneration and other flexible energy assets that can contribute to grid stability while generating additional revenue streams.
Learning from the Dutch CEA Model: Incorporating Cogeneration
The Netherlands has long been a leader in integrating cogeneration into its greenhouse industry. Utility companies offer financial incentives for CEAs to contribute excess energy back to the grid. This creates a mutually beneficial relationship where:
CEAs generate additional revenue by selling energy.
CEAs contribute to the grid's overall stability.
Moreover, the Dutch model exemplifies circular economy principles by capturing and repurposing CO2. Dutch CEAs convert CO2 into food-grade CO2, which is then used for applications like carbonating beverages, packaging, and other industrial processes, demonstrating how CEA can play a critical role in sustainable resource use.
Before the geopolitical disruptions caused by the Russian invasion of Ukraine, Dutch greenhouses were responsible for generating approximately 10% of the country’s electrical power through cogeneration. Post-invasion, driven by the need for greater energy efficiency, this figure increased to nearly 20%. This shift highlights the significant potential of cogeneration in enhancing energy security and resilience.
The Energy Economics of U.S. CEAs: A Key Consideration
As the U.S. CEA industry contemplates its next steps, energy costs are an increasingly critical factor. There are innovative, energy-efficient greenhouses, like those designed by Kubo. That said, electricity bills represent a substantial portion of operational expenses. Given this, many CEA facilities are already investing in microgrids or alternative power sources to maintain a stable electricity supply and enhance their resilience to grid fluctuations.
Exploring Opportunities with Local Utilities
As CEA operations consider ways to optimize energy usage and minimize costs, it’s essential to engage with local public utility systems to explore opportunities for collaboration. By leveraging state and utility incentives, CEA facilities can unlock new revenue streams, reduce energy costs, and contribute to a more resilient, decentralized energy grid.
Our client, Water Garden Farms, has taken a more holistic approach to Precision Agriculture. They are infusing IoT, AI and Passive Solar into the operations to limit cost exposure and create efficient operations.
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