Report of Findings

Greenhouse Energy Profile Study

September 27, 2019

Posterity Group
Independent Electricity System Operator
43 Eccles St, 2nd Floor – Unit 2
1600-120 Adelaide Street West
Ottawa, ON K1R 6S3
Toronto, ON M5H 1T1
Contents

Executive Summary 4

Acknowledgements 21

Acronyms and Definitions 22

1 Overview of Ontario’s Covered Agriculture Sector 25

1.1 Introduction 25
1.2 Key Regions 25
1.3 The Sector in 2018 29
1.4 Growth and Opportunities 36
1.5 Constraints and Challenges 40
1.6 The Sector in the Future: 2019-2024 Forecast 43

2 Energy Savings Potential 50

2.1 Energy Saving Potential Development 50
2.2 Measures 51

3 Sub-Sector Focus: Vegetables & Fruits 56

3.1 Sub-sector Description 56
3.2 Base Year (2018) Results 57
3.3 Reference Case (2019-2024) Forecast Results 65
3.4 Energy Saving Opportunities 70

4 Sub-Sector Focus: Flowers & Potted Plants 75

4.1 Sub-sector Description 75
4.2 Base Year (2018) Results 76
4.3 Reference Case (2019-2024) Forecast Results 83
4.4 Energy Saving Opportunities 87

i
5 Cannabis Sector 91
5.1 Cannabis in Canada 91
5.2 Cannabis in Ontario 91

6 Sub-Sector Focus: Greenhouse Cannabis 100

6.1 Greenhouse Cannabis Sub-Sector Description 100
6.2 Base Year (2018) Results 100
6.3 Reference Case (2019-2024) Forecast Results 106
6.4 Energy Saving Opportunities 110

7 Sub-Sector Focus: Indoor Cannabis 115

7.1 Sub-sector Description 115
7.2 Base Year (2018) Results 115
7.3 Reference Case (2019-2024) Forecast Results 121
7.4 Energy Saving Opportunities 124

8 Sub-Sector Focus: Vertical Farming & Other Covered Agriculture 129

8.1 Sub-sector Description 129
8.2 Base Year (2018) & Reference Case (2019-2024) Results 129
8.3 Energy Saving Opportunities 130

9 Energy Saving Incentive Programs 134

9.1 Existing Incentive Programs 134
9.2 Program Participation 137

10 Innovative & Emerging Technologies 139

11 Next Steps: Demand Side Management Priorities 144

11.1 LED Grow Lighting 144
11.2 Lighting Load Demand Response 149
11.3 Energy Supply Planning Focus: Regions with High Greenhouse Concentrations 151
11.4 Deeper Research in the Cannabis Sub-sector 151

ii
 11.5 Energy Efficiency as a Resource: Targeted Call for Pilot Programs 151

12 Bibliography 154

Appendix A Project Overview 163

Appendix B Model Structure 165

Appendix C Sector Scenarios 167

iii
 Executive Summary
The report was commissioned by the IESO with support of other utilities and agencies to uncover
opportunities to further support growth in the sector and ensure that customers continue to have access
to reliable and affordable energy. This information provides valuable data to the sector, utilities and
government in helping plan for future needs, and is a first step in working together to provide innovative
solutions for the sector to continue to thrive.
Since the 1990’s, Canada has become one of the largest producers of greenhouse products in North
America [1], with Ontario having the largest greenhouse sector in Canada relative to other provinces. In
2017, Ontario represented 60% of total national greenhouse area [2] and contributed 70% of farm gate
value. In 2016, the Ontario greenhouse sector supported $3.2 billion to GDP and over 80,000 jobs [3].
This study assesses the energy use of Ontario’s covered agriculture sector across four key sub-sectors:
vegetables & fruits, flowers & potted plants, greenhouse cannabis, and indoor cannabis. Vertical
farming is presented, but in less detail.
These sub-sectors are also examined across five regions: Essex, Chatham-Kent, Haldimand-Norfolk,
Niagara, and the Rest of Ontario. This report summarizes how energy is used across sub-sectors and
regions in 2018 and forecasts energy use and savings potential from 2019 to 2024.

Scale of Ontario’s Greenhouse Sector

The Essex region has the largest concentration of vegetable greenhouses in North America [4], Ontario is
the third largest producer of greenhouse-grown flower products in North America [5], and Ontario is
projected to become the largest cannabis production market in Canada [6].
In 2018 Ontario had 1621 million ft2 of covered agriculture; the vegetable sub-sector is the largest,
followed by flowers.
Exhibit 1 – 2018: Proportion of Floor Area by Sub-sector

4% 2%
<1% Vegetables and
Fruits
Flowers and
25% Potted Plants
Greenhouse
Cannabis
69% Indoor Cannabis

Vertical Farming

1
All numbers in the executive summary have been rounded.

4
Most of the greenhouse floor area in Ontario is in Essex County. There is more greenhouse area in Essex
County (84 million ft2), than in the rest of Ontario combined (78 million ft2).
Exhibit 2 – 2018: Floor Area by Sub-sector and Region
90,000,000 Vertical Farming
Indoor Cannabis
Greenhouse Cannabis
80,000,000 Flowers and Potted Plants
Vegetables and Fruits

70,000,000

60,000,000
2018 Area (sq. ft)

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

-
Essex County Rest of Ontario Niagara County Chatham-Kent County Haldimand-Norfolk
County

In 2018, cannabis producers had a footprint of 10 million ft2, but only 10% of this was planted and
growing product. The remaining facility area is expected to be utilized quickly, with 100% being built out
by 2023.
Exhibit 3 – 2018-2024: Total Area (sq. ft.) and % Under Production of the Cannabis Sector

16,000,000 100%
14,000,000
80%
12,000,000
Area (sq. ft.)

10,000,000 60%
8,000,000
6,000,000 40%
4,000,000
20%
2,000,000
- 0%
2018 2019 2020 2021 2022 2023 2024

Greenhouse Cannabis Indoor Cannabis

% Under Production

5
Average facility size varies considerably by sub-sector (and sometimes also by region):
• The average vegetable greenhouse in Essex and Chatham-Kent is 9 times larger than the average
in the rest of the province.
• The average flower greenhouse in Niagara and Haldimand-Norfolk is 2 times larger than the
average in the rest of the province.
• The average cannabis greenhouse in Essex and Chatham-Kent is 4.5 times larger than the average
in the rest of the province.
• The average indoor cannabis facility in Niagara is 3.5 times larger than the average in the rest of
the province.
Exhibit 4 – Average Facility Size (ft2) by Sub-sector by Region

700,000
Vegetables and Fruits
600,000 Flowers and Potted Plants
Greenhouse Cannabis
Average Area (sq. ft.)

500,000
Indoor Cannabis
400,000

300,000

200,000

100,000

6
How Energy is Used
In 2018 the sector consumed 7.5 eTWh of energy, 73% of this was fueled by natural gas and 18% from
electricity. Most of the energy is consumed by the vegetable sub-sector.
Exhibit 5 – 2018: Energy Consumption (MWh or eMWh) by Sub-sector and Fuel

6,000,000
Onsite Electricity Generation
Oil
Annual Energy Consumption (Mwh or eMWh)

5,000,000 Natural Gas

Grid Electricity
4,000,000 Cogeneration Heat
Biomass

3,000,000

2,000,000

1,000,000

-
Vegetables and Flowers and Greenhouse Indoor Cannabis
Fruits Potted Plants Cannabis

Electricity end-use intensity (kWh/ft2) varies across the greenhouse sub-sectors and between lit and
unlit facilities:
• A lit vegetable greenhouse consumes 10 times as much electricity as an unlit vegetable
greenhouse, with essentially all the additional electricity used for lighting.
• A lit flowers greenhouse consumes 4 times as much electricity as an unlit vegetable greenhouse.
• Indoor cannabis facilities use almost 3.5 times more electricity per square foot than lit vegetable
greenhouses.
• Indoor cannabis facilities use 1.4 times more electricity than cannabis produced in greenhouses.

7
 Exhibit 6 – Electricity End Use Intensity by Facility Type (kWh/ft2)

120

Lighting Pumping Other Heating (elec) Cooling

100
Energy Use Intensity (kWh/sq. ft.)

80

60

40

20

0
Lit Unlit Lit Flower Unlit Flower Lit Greenhouse Indoor Cannabis
Vegetable/Fruit Vegetable/Fruit Greenhouse Greenhouse Cannabis
Greenhouse Greenhouse

Horticulture Lighting
In 2018, more electricity was consumed for lighting (752,000 MWh) than for the other electrical end-
uses combined (637,000 MWh). The predominant lighting technology in the greenhouse sector
continues to be high-intensity discharge lighting, with high-pressure sodium (HPS) grow lights being
used in a typical covered agriculture facility.
Lighting was also the most significant driver of greenhouse peak hour demand in regions with high
concentration of lit greenhouses. Greenhouse peak hour is not coincident with the provincial system
summer or winter peaks. This is because the greenhouse peak hour aligns with the peak lighting load at
greenhouse facilities. In areas with high concentrations of greenhouses, this greenhouse peak hour is
impacting local transformer stations.

8
 Exhibit 7 – 2018: Electricity Consumption (MWh/yr.) by End Use and Sub-sector
800,000

700,000
Indoor Cannabis
Greenhouse Cannabis
Flowers and Potted Plants
600,000
Vegetables and Fruits
Annual Electricity Consumption (MWh/yr.)

500,000

400,000

300,000

200,000

100,000

-
Lighting Other Irrigation and Air Conditioning Space Heating
Circulation Pumps

Exhibit 8 – 2018: Demand by Peak Period and Region

120

100

80
Demand (MW)

60

Sum of Peak Hour

40
Sum of Summer Peak
Sum of Winter Peak
20

9
Forecasted Growth and Grid Constraints
Energy grid expansion (electric and gas) is occurring in areas where grid constraints exist and are
anticipated to experience further demand. Notable growth is expected over the next six years due to:
• Increased acreage in the vegetable sub-sector.
• The build out of greenhouse and indoor facilities serving the newly developed cannabis sub-
sector.
• The addition of horticulture grow lighting in the vegetable sector.
Exhibit 9 – Forecasted Growth in Area by Subsector (ft2)
200,000,000

175,000,000

150,000,000
Total Area (sq. ft)

125,000,000

100,000,000

75,000,000

50,000,000

25,000,000

-
2018 2024 2018 2024 2018 2024 2018 2024
Vegetables and Fruits Flowers and Potted Greenhouse Cannabis Indoor Cannabis
Plants

Exhibit 10 – Forecasted Growth in Energy Consumption by Sub-sector (eMWh/yr)

10,000,000

9,000,000
Annual Energy Consumption (eMWh/yr)

8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

-
2018 2024 2018 2024 2018 2024 2018 2024
Vegetables and Fruits Flowers and Potted Greenhouse Cannabis Indoor Cannabis
Plants

10
Due to the current concentration of vegetable greenhouses in the Essex region, the load profile for the
area differs from the rest of the province. As more greenhouses across Ontario use supplemental
lighting, and the footprint of the covered agriculture sector grows, other regions may take on the load
profile that is currently unique to Essex.
The Essex region is predicted to have the highest peak hour in 2024, largely due to an increase in grow
lighting in the region’s vegetable sub-sector (from 4% of greenhouse area in 2018 to 29% of area in
2024).
Exhibit 11 – Forecasted Change in Peak Hour Demand by Region
600

500

2018
2024
400
Peak Hour (MW)

300

200

100

0
Essex County Chatham-Kent County Haldimand-Norfolk Niagara County Rest of Ontario
County

Behind the Meter Tri-Generation

To address local connection constraints, growers that need additional capacity (e.g., due to the
introduction of year-round artificial crop lighting) are taking matters into their own hands and installing
gas-fired behind the meter tri-generation units. Tri-generation units (also known as combined heat and
power [CHP] units) generate electricity and produce the by-products of heat and carbon dioxide. Tri-
generation units are typically sized to offset lighting load and have the additional benefit of providing
heat and CO2 to the greenhouse2. Almost 70 MW of behind the meter generation is projected to be
operational by the end of 2019; by 2024, this is expected to increase.

2
This study did not quantify the CO2 benefits from tri-generation units. The analysis focuses on the electricity
generation and heat recovery; therefore we use tri-generation and CHP interchangeable throughout the report.

11
Near Term DSM Research Priorities
Energy supply planners, growers, and covered agriculture stakeholders should be focusing their
attention in the immediate term on three priority areas so that research and funding effort can be
applied judiciously to have the largest impact on supporting grid reliability through demand side
management.
LED Grow Lighting
Although there is a lot of discussion in the covered agriculture sector about light-emitting diodes (LED)
grow lights, it is not yet widely accepted as a viable replacement option for HPS fixtures. Until very
recently, no horticulture lighting standards existed for manufacturers. Growers have been skeptical of
performance of LED with as energy savings claims range from 20-60% and the costs of LEDs are currently
four to five times the price of HPS fixtures.
In response to the increasing interest in LED lighting in plant growth applications, The American Society
of Agricultural and Biological Engineers (ASABE) has developed new horticulture lighting standards. The
DesignLights Consortium (DLC) has also recently developed a new performance standard for LED
products and has a new Horticulture Qualified Products List. In the coming years these lighting standards
should help to build trust between growers and lighting manufacturers and suppliers regarding
performance information as LED technology continues to mature.
To illustrate the magnitude of the savings potential that will be possible in the future once LED becomes
more widely accepted as a legitimate replacement option, the study presents analyses on two
hypothetical savings scenarios. They show LED lighting could have an impact between 230 GWh/year
and 550 GWh/year by 2024.
Exhibit 12 – Hypothetical Consumption Savings Potential for 2 LED Scenarios
600,000
Annual Electricity Savings Potential (MWh/yr.)

500,000
LED Grow Lights A
LED Grow Lights B
400,000

300,000

200,000

100,000

-
2019 2020 2021 2022 2023 2024

Lighting Load Demand Response

Because grow lighting is a significant contributor to greenhouse load demand in regions with high
concentrations of greenhouses (e.g. Essex, Niagara), demand response targeting lighting schedules could
have a notable impact on peak reductions. In practice, this load could be shed by:

12
 • Turning-off lighting (or reducing lighting levels) when the local grid is projected to peak (between
5am and 9am, weekdays, Jan, Feb and Dec);
• Staggering light cycles; or ,
• Potentially leveraging other technologies that could achieve the same impact (e.g., storage,
behind the meter generation).
The good news is that demand response in the greenhouse sector has been around for a long time; in
the 1980’s well known methods for demand response were implemented in the covered agriculture
sector by Ontario Hydro and other North American utilities. Today in Colorado, Xcel Energy is running a
demand response program with greenhouse participants. Demand response aggregators are helping
covered agriculture customers in Colorado earn revenue by reducing their lighting load for less than one
hour a week [68].
Innovative Technology
Beyond the DSM opportunities discussed and analyzed in detail in this study, there are several promising
innovative solutions Ontario’s covered agriculture sector and energy supply planners will be paying close
attention to in the coming years:
• Greenhouse-integrated semi-transparent solar photovoltaics
• Seasonal thermal energy storage assisted ground-source heat pump
• ‘Nextgen’ control systems leveraging advanced sensors and artificial intelligence
• Hybrid generation & storage
• Microgrids and asset networking
Covered agriculture growers have a long history of adoption of innovative practices and technologies
and will continue to assess and adopt new solutions when sound business cases can be substantiated.
Research and pilot testing of several promising technologies and energy solutions over the next five
years is important to build credible business cases for DSM, to enable cost reduction and increased
competitiveness, and ensure energy reliability and resilience.

13
Sub-Sector Highlights: Vegetables & Fruits
The vegetable and fruit greenhouse sub-sector is the largest and fastest growing segment of the
horticulture sector in Canada [7]. As of 2017, most of the greenhouse acreage in Ontario produced
vegetables. The main vegetable crops are tomatoes, peppers and cucumbers which account for almost
98% of total vegetable harvest, with each accounting for about one-third of vegetable production [8].
Other vegetable crops include lettuce, eggplant and herbs. Some fruits are also produced in
greenhouses, including a variety of berries [9]. The 2017 farm gate value from Ontario greenhouse
vegetables was $840 million, with more than 70% of produce exported to the U.S. [8]. In 2016, the
export value of greenhouse vegetables was the highest of all fresh produce exports, accounting for
about 40% of all fresh produce exports from Canada [7].
This sub-sector is concentrated in the Essex region. Of the 224 members of the Ontario Greenhouse
Vegetable Grower (OGVG) association, 85% are in the Essex region [10]. Greenhouses are concentrated
in this area in part due to the warm climate (relative to the rest of Canada) and close proximity to the
U.S. [10].

Greenhouses used for these crops tend to have glass roofing, use energy screen systems, and heat with
centralized steam or hot water systems, including after-market condenser systems. Structures are
ventilated using horizontal fans and climate control is managed through integrated computer-controlled
systems. These greenhouses are large natural gas consumers with their major end-uses being space
heating. Vegetable greenhouses traditionally did not use supplemental grow lighting, but this beginning
to change with growers looking to increase production to meet increasing demand. Lit vegetable
greenhouses tend to consume a significant amount of electricity, and existing greenhouses introducing

14
grow lighting is expected to be a significant driver of electricity growth in this sector over the next six
years.
Between 2018 and 2024, electricity consumption in the vegetable sub-sector is forecasted in increase by
282%. Over the same time period, greenhouse peak hour demand is projected to increase by 552%.
• The vegetable sub-sector is forecast to grow by 5% per year for all regions over the next five years.
Essex County is an exception, growing at an average of 9% year over year during the reference
period. Due to a high number of connection requests in the area, growth is expected to follow the
IESO’s electricity demand growth forecast.
• The lit portion is expected to increase from 4% in 2018 to 8% by 2020 in all regions except Essex,
where the lit percentage increases to 29% by 2024 (existing growers adding grow lighting is a
significant contributor to the electricity demand forecast in the region).
Exhibit 13 – Vegetable Sub-sector Electricity Growth by Region (MWh/yr.)

Exhibit 14 – Vegetable Sub-sector Peak Hour Demand Growth by Region (MW)

15
Sub-Sector Highlights: Flowers & Potted Plants
The flower and potted plant sub-sector includes flowering potted plants, cut flowers, and bedding plants
in greenhouses and hoop houses. Ontario is the third largest producer of greenhouse-grown flower
products in North America, with a farm gate value of $1.4 billion in 2012. The sub-sector in Ontario is
concentrated in the Niagara region with a mixture of large wholesale growers and smaller retail-
oriented growers. Many flower growers only operate 7.5 months of the year as winter offers lower
consumer demand and higher energy costs.
Flower greenhouses tend to be small operations (below the provincial average of 2 acres for
greenhouses in other sub-sectors). Structures typically have double layer polyethylene roofing, heat
with gas-fired unit heaters and ventilate using horizontal fans.

The flowers sub-sector has declined in recent years, both in terms of number of growers and total
acreage. The shrinkage in the sector is in part due to conversions of greenhouses to produce vegetables
or cannabis, fewer exports to the US [5], and changing consumer preferences [11]. Sales of greenhouse
flowers and plants declined by about 2% between 2016 and 2017 in Ontario [1].

16
Between 2018 and 2024, electricity consumption in the flowers sub-sector is forecasted in increase by
4%. Over the same time period, greenhouse peak hour demand is projected to increase by 4%.
• The flowers sector is forecasted to grow by increasing the size of existing facilities by 1% per year
in Niagara region and 0.5% per year for all other regions.
• The lit portion is expected to remain the same at 75% over the next six years.
Exhibit 15 – Flower Sub-sector Electricity Growth by Region (MWh/yr.)

Exhibit 16 – Flower Sub-sector Peak Hour Demand Growth by Region (MW)

17
Sub-Sector Highlights: Cannabis
Sales of recreational cannabis in the province are projected to be $930 million in 2019 and go up to
$2.38 billion in 2021. Currently, the Ontario cannabis market supports about 5,700 jobs, of which 58%
are in the agricultural sector. Although supply was unable to meet demand when the online legal market
was launched, the sector is expected to be able to meet demand by 2020 and Ontario is projected to be
the largest cannabis market in Canada.

For the legal medicinal market, cannabis was typically grown indoors. Compared to the vegetable sub-
sector, cannabis operations use significantly more electricity (e.g., indoor cannabis facilities use more
almost 3.5 times more electricity per square foot than lit vegetable greenhouses), with some facilities
that have electricity demand peaks in excess of 10MW.
For the recreational market, many growers are choosing greenhouses instead. Cannabis grown in
greenhouses consumes 37% less electricity than cannabis grown indoors, offering producers cost
savings. Greenhouses reduce the need for supplemental lighting and air conditioning – both of which
are required for indoor operations and are costly. As the price of legal cannabis declines, producers will
need to reduce operating costs to stay competitive [12]. Many greenhouse cannabis producers
purchased existing greenhouses – often growing flowers – and converted them to their specific growing
needs.

Ontario’s capabilities and expertise in the greenhouse agriculture sector represent a unique
opportunity for the province to export skills and knowledge to the cannabis sector in other regions
across Canada and the U.S.

18
Greenhouse Cannabis
Between 2018 and 2024, electricity consumption in the greenhouse cannabis sub-sector is forecasted in
increase by 1,909%. Over the same time period, greenhouse peak hour demand is projected to increase
by 1,904%.
• Starting at 8% in 2018, the facility area that is planted and growing product is expected to be built
out quickly, with 100% being built out by 2023. In addition to this, the sub-sector is projected to
add another million ft2 a year in 2023 and 2024.
• Essex County is an exception, growing at an average of 9% year over year during the reference
period. Due to a high number of connection requests in the area, growth is expected to follow the
IESO’s electricity demand growth forecast.
• The lit portion is expected to increase from 90% in 2018 to 100% by 2020 in all regions.
Exhibit 17 – Greenhouse Cannabis Electricity Growth by Region (MWh/yr.)

Exhibit 18 – Greenhouse Cannabis Peak Hour Demand Growth by Region (MW)

19
Indoor Cannabis
Between 2018 and 2024, electricity consumption in the indoor cannabis sub-sector is forecasted in
increase by 912%. Over the same time period, greenhouse peak hour demand is projected to increase
by 911%.
• Starting at 16% in 2018, the facility area that is planted and growing product is expected to be
built out quickly, with 100% being built out by 2023. Beyond the growth in area used for
production, no new indoor cannabis facilities are expected to be constructed, except for the
Chatham-Kent region where a large indoor cannabis facility is coming online in 2020 (55% of the
load is coming online in 2020 and remaining part of the facility will come online in 2023).
• The lit portion is expected to increase from 90% in 2018 to 100% by 2020 in all regions.
Exhibit 19 – Indoor Cannabis Electricity Growth by Region (MWh/yr.)
400,000

350,000
Annual Electricity Consumption (MWh/yr)

300,000

250,000

200,000

150,000

100,000

50,000

-
2018 2024 2018 2024 2018 2024 2018 2024
Chatham-Kent County Haldimand-Norfolk Niagara County Rest of Ontario
County

Exhibit 20 – Indoor Cannabis Peak Hour Demand Growth by Region (MW)

90

80
70
Peak Hour (MW)

60
50
40

30
20
10

-
2018 2024 2018 2024 2018 2024 2018 2024
Chatham-Kent County Haldimand-Norfolk Niagara County Rest of Ontario
County

20
 Acknowledgements
This report was prepared for the Independent Electricity System Operator (IESO) with additional funding
provided by Enbridge Gas Inc. (Enbridge) and the Ontario Greenhouse Vegetable Growers (OGVG). The
study engaged an Advisory Committee to provide sectoral insight and intelligence. We would like to
thank all individuals on the Advisory Committee who generously contributed important sectoral
information and data, as well as their time to review the study research inputs and assumptions and
sectoral findings.
Organizations that provided data and input for the study are:
• Ag Energy
• Cannabis Council of Canada
• Enbridge Gas Inc.
• Entegrus Powerlines
• Essex Power
• Flowers Canada Ontario
• Hydro One
• Independent Electricity System Operator
• Niagara on the Lake Hydro
• Niagara Peninsula Energy
• Ontario Federation of Agriculture
• Ontario Greenhouse Vegetable Growers
• Ontario Ministry of Agriculture, Food and Rural Affairs
We would like to express our gratitude to each grower that participated in our focus group sessions,
surveys and facility walk-throughs.
We also greatly appreciate the support received by market actors who participated in our interviews,
including energy managers and organizations that manufacture greenhouses and/or supply equipment
to greenhouse operations.

21
 Acronyms and Definitions
Acronyms
CHP Combined Heat and Power
CO2 Carbon Dioxide
DR Demand Response
DSM Demand side management
eMWh Equivalent Megawatt Hour
eTWh Equivalent Terrawatt Hour
GWh Gigawatt hour
HPS High Pressure Sodium
HVAC Heating, Ventilation, Air Conditioning
IESO Independent Electricity System Operator
IRRP Integrated Regional Resource Plan
kW Kilowatt
kWh Kilowatt-hour
LDC Local distribution company
LED Light-emitting Diodes
MW Megawatt
MWh Megawatt-hour
OEB Ontario Energy Board
OGVG Ontario Greenhouse Vegetable Growers
TRC Total Resource Cost
VFD Variable Frequency Drive

Definitions
Acre: 43,560 square feet
Area Built Out and Operating (%): Primarily used for cannabis facilities, this parameter indicates the
amount of square footage in an existing facility that is fully operational, as opposed to square footage
that is currently not being used for production.
Base Year: The base year is the first year of the study and is based on the most recent year for which
data can be gathered on the parameters required to assess energy consumption. For this study, the base
year is the energy and water consumption in 2018, the first year of the study period. The base year is
broken down by region, sub-sector, end-use, fuel, and if a greenhouse has supplemental lighting or not.
Energy Savings Potential: The amount of energy (electricity or natural gas) that could be saved by
implementing a specific technology (“measure”) or from adjusting operations to reduce energy
consumption during a specific time period.
Lit Portion: The portion of facility area that has supplemental lighting.
Load Profiles: Load profiles illustrate the energy used in a specific time period (hour or month) to show
when energy use is highest and lowest. For this study, load profiles were developed for electricity and
natural gas in lit and unlit vegetable, flowers and cannabis facilities.

22
Peak Period: The time of day when energy demand is highest. Peak periods vary between seasons in
Ontario, and typically occur on weekdays when businesses are operating.
There are three peak periods considered in this study, as follows:
Exhibit 21 – Peak Period Definitions
Peak Period Hours of the Day Days of the Week Months of the Year

Summer 1pm to 7pm weekdays June, July and August

Winter 6pm to 8pm weekdays January, February and December

Greenhouse Peak Hour Peak Hour Occurs in February. See definition below.

For this study, we defined ‘Greenhouse Peak Hour” as the hour with the highest predicted aggregate
electricity use in Essex region’s covered agriculture facilities; in other words, the one hour that uses
more electricity than any of the other 8,759 hours in the year. The greenhouse peak hour is coincident
with the peak lighting load at greenhouse facilities. In areas with high concentrations of greenhouses,
this greenhouse peak hour is impacting local transformer stations.
Reference Case: The reference case forecast begins with the base year (2018) and then forecasts
consumption under current “business as usual” conditions for the next six years (2019-2024). The
reference case accounts for growth (both in terms of the number of greenhouses and their energy
consumption), changing operations (e.g., adding grow lighting) and substitutions in energy sources (e.g.,
adding more behind the meter generation). Accounts are scaled to represent the forecast for regional
energy footprints and profiles, as well as an aggregate profile for the province as a whole.

23
Overview of Ontario’s
Covered Agriculture
Sector

24
1 Overview of Ontario’s Covered Agriculture Sector
1.1 Introduction
In this study, the covered agriculture sector is defined as agricultural products produced in self-contained
controlled environments [7]. “Greenhouse” sector is used interchangeably with “covered agriculture”
throughout this report; however indoor cannabis and vertical farming sub-sectors are also included.
Since the 1990’s, Canada has been the largest producer of greenhouse products in North America [1].
Ontario has the largest greenhouse sector in Canada relative to other provinces. In 2017, Ontario
represented 60% of total national greenhouse area [2] and contributed 70% of farm gate value. The
Essex region in south-western Ontario has the largest concentration of greenhouses in North America
[13]. In 2016, the greenhouse sector supported $3.2 billion to GDP and over 80,000 jobs [3]. Due to the
ability to control environmental conditions, greenhouses produce seven times higher yields compared to
field production [14]. The industry is innovating, with research and development for the use of robotics
and automation to make growing produce more efficient [14].

1.2 Key Regions

The study breaks the province into five regions due to their concentration of greenhouses and unique
characteristics: Essex, Chatham-Kent, Haldimand–Norfolk-Haldimad, Niagara, and the Rest of Ontario. A
brief description of each region in terms of location and their covered agriculture industry are provided
below.

25
 1.2.1 Essex
The Essex region is the most southern portion of the province, and includes the City of Windsor, the
Municipality of Leamington, the Township of Pelee, and the towns of Kingsville, Essex, and LaSalle.
Exhibit 22 – Map of the Essex Region [15]

The Essex region was previously dominated by the

manufacturing sector, particularly the automotive Essex County, the most southern part of the
industry, which has declined since the recession in province, has the largest concentration of
2008. The region’s rural areas are dominated by vegetable greenhouses in North America
agriculture, particularly vegetables and fruits [4]. Ontario is the third largest producer of
grown in greenhouses, with Essex County having greenhouse-grown flower products in
the largest concentration of vegetable greenhouses North America and is projected to be the
in North America [4]. As the most southern region largest cannabis market in Canada [6].
of the province, Essex has 212 growing days per
year, which supports the $3 billion agricultural industry in the area [16]. This greenhouse industry is
growing in the region, including the recent addition of cannabis facilities.

Seacliff Energy is an anaerobic digester facility in Leamington that recycles organic materials –
including reject vegetables from local greenhouses - into renewable electricity and organic
fertilizer. The facility generates 1.6 MW of electricity per hour and provides heat to the 7-acre
greenhouse on site [17].

26
 1.2.2 Chatham-Kent
The Chatham-Kent region is in south-western Ontario, as displayed in the map in Exhibit 23
Exhibit 23 – Map of the Chatham-Kent Region [18]

Chatham-Kent is a relatively rural region with a predominant agriculture sector. There are a significant
number of greenhouses in the region growing over 70 types of crops, mainly vegetables and fruits. The
greenhouse sector has been growing in the region over the last decade [19].
Enbridge is currently working on the Chatham-Kent Rural Pipeline Expansion project to provide more
natural gas to the area, largely due to the growing greenhouse sector [20].

27
 1.2.3 Haldimand–Haldimand–Norfolk Region
The Haldimand–Haldimand–Norfolk region is in southwestern Ontario on the north shore of Lake Erie,
as displayed on the map below.
Exhibit 24 – Map of the Haldimand–Norfolk Region [21]

Haldimand–Haldimand–Norfolk has a dominated agriculture sector, including greenhouses growing

flowers, and fruits [22].

28
 1.2.4 Niagara
As displayed in the map below, the Niagara region is in southern Ontario in between Lake Ontario and
Lake Erie and to the west of the Niagara River.
Exhibit 25 – Map of the Niagara Region [23]

Greenhouses in the Niagara region predominantly produce flowers and potted plants. The Niagara
region is home to 50% of flower greenhouses and 60% of production area for flowers [5].
1.2.5 Rest of Ontario
The Rest of Ontario region includes all areas of the province excluding the other study regions already
defined. The Rest of Ontario includes the northern areas of the province and the area east of the
Niagara region.

1.3 The Sector in 2018

Exhibit 26 and Exhibit 27 show the number of greenhouse facilities and proportion of floor area by sub-
sector, respectively. These exhibits illustrate that most greenhouses are in the flower and vegetable sub-
sectors and most of the square footage of the sector is producing vegetables and fruits.

29
 Exhibit 26 – 2018: Facilities by Exhibit 27 – 2018: Area (sq. ft.) by Sub-sector
Sub-sector 6,636,049 3,586,350 50,000
2
0% 4% 2% 0%
49
3%
347
18%
671
36% Vegetables and Fruits
39,647,931
25% Flowers and Potted Plants
Greenhouse Cannabis
Indoor Cannabis
111,893,282 Vertical Farming
69%

817
43%

Exhibit 28 shows the number of facilities by region and Exhibit 29 shows the area (square feet) by
region. While Exhibit 28 illustrates that the majority of facilities are located in the Rest of Ontario region,
Exhibit 29 shows that most of the footprint of the sector is in the Essex Region.

Exhibit 28 – 2018: Facilities by Region Exhibit 29 – 2018: Area (sq. ft.) by Region

40
181 2%
9%
33,899,369
129 21%
7%
Essex County
212 Chatham-Kent County
11% 22,172,039 84,114,859 Haldimand-Norfolk County
14% 52%
Niagara County
Rest of Ontario
1,344
71%
8,995,536
5%
12,965,868
8%

30
Exhibit 30 shows that most of the greenhouse floor area in Ontario is in Essex County. There is more
floor area in Essex County (84,000,000 ft2), than in the rest of Ontario combined (78,000,000 ft2). Exhibit
30 also shows that most of the greenhouse floor area in Ontario in 2018 was used to grow vegetables,
followed by flowers.
Exhibit 30 – 2018: Floor Area by Sub-sector and Region
90,000,000 Vertical Farming
Indoor Cannabis
Greenhouse Cannabis
80,000,000 Flowers and Potted Plants
Vegetables and Fruits

70,000,000

60,000,000
2018 Area (sq. ft)

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

-
Essex County Rest of Ontario Niagara County Chatham-Kent County Haldimand-Norfolk
County

31
Exhibit 31 presents the 2018 electricity consumption (MWh) by fuel and sub-sector. Electricity
generated on-site (by CHP units) is a very small portion of the supply. The Flowers sub-sector consumed
the most electricity, as this sub-sector already had supplemental lighting while other sub-sectors did not
in 2018.
Exhibit 31 – 2018: Electricity Consumption (MWh) by Fuel and Sub-sector
900,000 Onsite Electricity Generation
Grid Electricity

800,000

700,000
Annaul Electricity Consumption (MWh)

600,000

500,000

400,000

300,000

200,000

100,000

-
Vegetables and Fruits Flowers and Potted Greenhouse Cannabis Indoor Cannabis
Plants

32
Exhibit 32 shows base year energy consumption by sub-sector and fuel. Onsite electricity generation
represents electricity generated via behind the meter tri-generation units; cogeneration heat represents
the natural gas heating displaced by the tri-generation units. Biomass and oil represent approximately
10% of the heating load in Ontario.
Exhibit 32 – 2018: Energy Consumption (MWh) by Fuel and Sub-sector

33
Exhibit 33 shows demand by peak period for the Chatham-Kent, Essex, Haldimand–Norfolk and Niagara
regions for the base year. The exhibit illustrate that the greenhouse peak hour is not coincident with the
provincial system summer or winter peaks. This is because the greenhouse peak hour aligns with the
peak lighting load at greenhouse facilities. In areas with high concentrations of greenhouses, this
greenhouse peak hour is impacting local transformer stations.
The Niagara region had the highest demand in 2018 due the high proportion of flower greenhouses in
this region. Flower greenhouses had a relatively high adoption rate of horticulture grow lighting in 2018
(75% of the floor area is lit compared to only 4% for vegetable greenhouses).
Exhibit 33 – 2018: Demand by Peak Period and Region
120

100

80
Demand (MW)

60

Sum of Peak Hour

40
Sum of Summer Peak
Sum of Winter Peak
20

34
Exhibit 34 shows electricity consumption (grid electricity and on-site generation) by end-use and sub-
sector for the base year. More electricity is consumed for lighting (752,000 MWh) than for the other
electrical end-uses combined (637,000 MWh).
Exhibit 34 – 2018: Electricity Consumption (MWh/yr.) by End Use and Sub-sector
800,000

700,000
Indoor Cannabis
Greenhouse Cannabis
Flowers and Potted Plants
600,000
Vegetables and Fruits
Annual Electricity Consumption (MWh/yr.)

500,000

400,000

300,000

200,000

100,000

-
Lighting Other Irrigation and Air Conditioning Space Heating
Circulation Pumps

35
Exhibit 35 shows natural gas consumption by end use and sub-sector for the base year. The generation
end use represents natural gas consumed by behind the meter tri-generation units.
Exhibit 35 – 2018: Natural Gas Consumption (eMWh) by End Use and Sub-sector
6,000,000 Indoor Cannabis
Greenhouse Cannabis
Flowers and Potted Plants
5,000,000
Vegetables and Fruits
Annual Energy Consumption (eMWh/yr.)

4,000,000

3,000,000

2,000,000

1,000,000

-
Space Heating Generation

1.4 Growth and Opportunities

There are many factors contributing to the success of the greenhouse sector and many opportunities for
continued growth in the province, including:
1.4.1 Strong exports
Ontario exports vegetables, fruits and flowers to international markets. About 70% of all greenhouse
produce is exported to the U.S. [24]. Exports of greenhouse cucumbers to the U.S. increased by more
than 50% from 2012 to 2017 [24].

36
 1.4.2 Increased demand for local, healthy
foods
Many consumers are increasingly preferring to buy
healthy and/or local food [7] [25]. This trend has
contributed to increased demand within Ontario for
locally grown produce, which is often grown in
greenhouses [26].
1.4.3 Support from government
Government has provided funding to support the
success of Ontario’s greenhouse sector. Funding has
come from municipal, provincial and federal
government for initiatives that support innovation and
economic growth. Examples of government support
include:
• The Canadian Agricultural Partnership – a
commitment from all levels of government
to provide funds to support Canada’s agri-
food and agri-products sector, including
greenhouses in Ontario.
• The Greenhouse Competitiveness and
Innovation Initiative – the Province of
Ontario provided $19 million to support projects that develop and adapt technologies that
help the competitiveness of Ontario’s commercial greenhouse sector. The Initiative is
administered by the Agricultural Adaptation Council [27].
1.4.4 Expanded energy supply in respond from the growth in the greenhouse sector
Infrastructure for both electricity and natural gas have been expanded in recent years in response to
growth in the greenhouse sector in the province. Section 1.5.1 discusses the challenges growers face
when energy is limited.
Natural Gas
Natural gas pipeline has been expanded and reinforced in part to respond to the growing greenhouse
sector in Ontario. Enbridge (and legacy Union Gas) invested almost $2 billion in infrastructure between
2015 and 2017, including a $265 million expansion of the Panhandle transmission system to meet in part
the growing demand from the greenhouse sector in the Essex and Chatham-Kent regions [28]. The
Ontario Energy Board (OEB) recently approved a reinforcement project to the Kingsville and Leamington
area (the Kingsville Transmission Reinforcement Project), in part to support the increasing demand for
gas from greenhouses [29].

37
 Exhibit 36 – Panhandle Reinforcement & Kingsville Transmission Reinforcement Projects [30]

An application is also currently under review by the OEB to expand the Chatham-Kent Rural Pipeline;
another region with a growing greenhouse sector [20] [31].
Electricity
The IESO reports “unprecedented growth in forecast electricity usage for the greenhouse sector in the
Kingsville-Leamington area” in a June 2019 report that recommends installing new bulk system facilities
to in part address the electricity needs of the sector; growth that is primarily from the introduction of
supplemental grow lighting in the vegetable sub-sector, additional vegetable acreage, and the new
cannabis sub-sector [32].
Hydro One received connection requests in excess of 1,000 MW for customers wishing to connect in the
Leamington-Kingsville area [32].

38
 Exhibit 37 – Electricity Winter Peak Forecast Scenarios for Kingsville-Leamington [32]

The existing infrastructure was sized to support a winter peak load below 300 MW and was not able to
support these requests, hence the IESO, Hydro One, and Local Distribution Companies are working to
expand the system to meet the growing need for electricity in the region [33] [34] [35] [36].
The IESO convened a technical working group for the regional planning process in the Windsor-Essex
region to discuss challenges and opportunities related to local electricity needs [36].

39
 Exhibit 38 – Essex Region Electrical Single Line Diagram [34]

In response to connection requests in the Kingsville-Leamington area, mainly from large greenhouse
customers, the following measures have been planned and will facilitate a significant increase in peak
winter load capacity by 2026:
• Interim measures to enable a larger load meeting capability in the immediate term: in
service starting in 2019. [36]
• Leamington Transformer Station upgrade: in service starting in 2020. [36]
• New switching station near Leamington (Lakeshore Transformer Station): in service starting
2023 and relieving need for interim measures. [37]
• New Chatham to Lakeshore transmission line: in service starting 2026. [38]

1.5 Constraints and Challenges

Profitability and growth of the greenhouse sector in Ontario faces constraints and challenges. Each sub-
sector and region have different barriers and limitations, and these factors are in flux. The following
section summarizes some of the key constraints faced by greenhouse operators in the province.
1.5.1 Limited Energy Supply
Some growers do not have access to enough energy - natural gas or electricity - to meet their
production needs.

40
Natural Gas
Many greenhouse operators want “firm” natural gas service contracts so they can access a fixed volume
of natural gas all year. However, many growers cannot have a firm contract due to limited natural gas
infrastructure. Instead, they have interruptible contracts that require switching to other fuels for
heating during periods of extreme cold [39, p. 18].
Electricity
As discussed in the previous section,
there are significant infrastructure
improvements planned in the Essex
region to address forecasted growth
constraints. Until the full scope of
reinforcements are completed, growers
in this region will continue to
experience electricity connection
constraints.
One of the indicators for additional
electricity growth is the availability and
ease of access to gas and water
infrastructure. For example, if the OEB
approves the Chatham-Kent Rural
Pipeline expansion, the Chatham-Kent region could see an increase in electricity connection requests –
similar to those being submitted in the Essex region after the after the Kingsville Transmission
Reinforcement Project was approved. Already there are electricity constraints in the Chatham-Kent
area, with a new 55MW cannabis facility that is able to connect 30MW in 2020, but must wait until 2023
to connect the rest of the facility. Niagara and Haldimand-Haldimand–Norfolk regions are also strong
candidates for additional growth and constraints in future years.
To address local connection constraints, growers that need additional capacity (e.g., due to the
introduction of year-round artificial crop lighting) are taking matters into their own hands and installing
behind the meter tri-generation (also known as combined heat and power) units. These units are
typically sized to offset lighting load and have the additional benefit of providing heat and CO2 to the
greenhouse.
Almost 70 MW of behind the meter generation is projected to be operational by the end of 2019; by
2024, this is expected to increase.
Exhibit 39 and Exhibit 40 show a small increase by 2024 is very likely (total of over 73 MW of behind the
meter generation); however, a larger increase by 2024 is also possible (e.g., the total installed capacity
could be greater than 100 MW by 2024).

41
 Exhibit 39 – Forecasted Peak Capacity of Tri-gen/CHP by Region in 2024

6.00
17.31 8%
9.86
24%
13% 0.16 Chatham
0% Niagara
Norfolk County
Windsor-Essex
39.91 Rest of Province
55%

Exhibit 40 - Forecasted Peak Capacity of Tri-gen/CHP by Sub-sector in 2024

7.17
10%
18.71
25%
Vegetable
Flowers
Cannabis Greenhouse
11.06 Cannabis Indoor
36.31
15%
50%

1.5.2 Increased Operating Costs

Many greenhouse operators are experiencing increased operating costs [40], mainly due to:
• Increased minimum wage – Ontario’s minimum wage increased from $11.60/hour in 2017
to $14.00/hour in 2018. Most greenhouses employ people to perform many of the daily
operating tasks, so the increase in minimum wage had a direct impact on operating costs.
• Price on carbon – the federal carbon price impacted some larger greenhouses which had to
pay for GHG emissions if they were a large emitter.
1.5.3 Disruption from the New Legal Cannabis Market
The legalization of recreational cannabis in 2018 resulted in some existing greenhouse operators selling
their facilities to cannabis producers. This new sector attracted labour and construction resources, in
some cases limiting the availability of these resources to greenhouse operators in existing markets. As
the recreational cannabis market is in its infancy in Canada, there is uncertainty about its future and
impact on the existing greenhouse sector [41].

42
 1.5.4 Uncertain Terms of Trade
Renegotiation of trade agreements and the use of tariffs for political purposes has created uncertainty
for trade within North America [42], including for the greenhouse sector which exports a significant
amount of produce and flowers south of Canada’s border.

1.6 The Sector in the Future: 2019-2024 Forecast

Exhibit 41 shows the reference case (business as usual) energy consumption (all fuels) for each sub-
sector over the study period.
Energy consumption is expected to increase across all sub-sectors, with the largest relative growth
occurring in the greenhouse cannabis and indoor cannabis sub-sectors. Greenhouse cannabis
consumption is forecasted to increase from 1% of sector energy consumption in 2018 to 7% by 2024,
while indoor cannabis is expected to increase from 1% of consumption in 2018 to 6% of consumption by
2024. In both cases this is being driven largely by build-out of existing area. In 2018 only 1 million ft2 of
the total sub-sector area (10%) was planted and growing product.
The largest absolute growth is occurring in the vegetable sub-sector. Vegetable greenhouse energy
consumption is forecasted to increase by 84% from 2018 to 2024; growth that is being driven by both
increased greenhouse area, and a greater proportion of greenhouse area expected to be using grow
lighting by 2024.
Exhibit 41 – Forecasted Annual Energy Consumption by Sub-sector

14,000,000

12,000,000
Annual Energy Consumption (eMWh/yr.)

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

-
2018 2019 2020 2021 2022 2023 2024
Vegetables and Fruits Flowers and Potted Plants
Greenhouse Cannabis Indoor Cannabis
Vertical Farming

43
Exhibit 42 shows the projected annual electricity consumption (MWh) by sub-sector. In 2018, the sector
consumed almost 1.4 TWh of electricity. It is forecasted that the sector will consume about 3.9 TWh of
electricity in 2024. The vegetable sub-sector is expected to have a significant increase in electricity
consumption. The Vegetable and Fruits sub-sector consumed about 473,000 MWh of electricity in 2018.
Electricity consumption from this sub-sector is expected to increase by 282% in the next five years (to
1,808,000 MWh in 2024). This increase in electricity is driven by growth in square footage and the
addition of supplemental lighting.
Exhibit 42 – Forecasted Annual Electricity Consumption (MWh) by Sub-sector

4,500,000
Annual Electricy Consumption (MWh/yr)

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

-
2018 2019 2020 2021 2022 2023 2024
Vegetables and Fruits Flowers and Potted Plants
Greenhouse Cannabis Indoor Cannabis
Vertical Farming

Exhibit 43 shows the reference case energy consumption (all fuels) by region during the study period.
Consumption is projected to increase year over year in all regions.
Moderate growth is expected across most regions, but Essex and Chatham-Kent are exceptions.
• In Essex, the greenhouse cannabis and vegetable sub-sectors are expected to grow at an average
of 9% year over year. Also, the lit portion of the vegetable sector is expected to increase from 4%
in 2018 to 29% in 2024. This growth aligns with the IESO’s electricity demand growth forecast and
is based on Hydro One’s backlog of connection requests and projected available capacity over the
next 6 years.
• In Chatham-Kent, a large indoor cannabis facility is coming online in 2020 (55% of the load is
coming online in 2020 and remaining part of the facility will come online in 2023).

44
 Exhibit 43 – Forecasted Annual Energy Consumption (eMWh or MWh) by Region

16,000,000
Annual Energy Consumption (eMWh or MWh)

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

45
Exhibit 44 shows the forecast electricity consumption (MWh) by region. Electricity consumption is
expected to rise in all regions however Essex is of particular interest: In 2018, the covered agriculture
sector in Essex county consumed almost 0.4 TWh of electricity; it is forecasted to consume about 1.8
TWh of electricity in 2024, a 351% increase. This increase is driven by the growth in acreage and the
addition of supplemental lighting in vegetable greenhouses. There is also a large increase in electricity
consumption expected in the Chatham-Kent region: In 2018, the covered agriculture sector in Chatham-
Kent county consumed more than 69 MWh of electricity; it is forecasted to consume more than 384
MWh of electricity in 2024, a 455% increase.
Exhibit 44 - Forecasted Electricity Consumption (MWh) by Region

4,500,000
Annual Electricity Consumption (MWh)

4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

46
Exhibit 45 shows the reference case forecast for energy consumption by fuel. Consumption of electricity
and natural gas are expected, as displayed in the exhibit below.
Exhibit 45 – Forecasted Energy Consumption by Fuel
14,000,000

12,000,000
Annual Energy Consumption (eMWh/yr. or MWh/yr.)

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

-
2018 2019 2020 2021 2022 2023 2024
Biomass Grid Electricity Natural Gas Oil Cogeneration Heat Onsite Electricity Generation

47
Exhibit 46 shows forecasted demand by peak period for the Chatham-Kent, Essex, Haldimand-
Haldimand–Norfolk and Niagara regions in 2024. The exhibit illustrate that the greenhouse peak hour is
not coincident with the provincial system summer or winter peaks. This is because the greenhouse peak
hour aligns with the peak lighting load at greenhouse facilities. In areas with high concentrations of
greenhouses, this greenhouse peak hour is impacting local transformer stations.
The Essex region is predicted to have the highest peak hour in 2024, largely due to an increase in grow
lighting in the region’s vegetable sub-sector (from 4% of greenhouse area in 2018 to 29% of area in
2024).
Exhibit 46 – 2024: Demand by Peak Period and Region

600

500

400
Demand (MW)

300

Sum of Peak Hour

200
Sum of Summer Peak

100 Sum of Winter Peak

48
Energy Savings
Potential

49
2 Energy Savings Potential
2.1 Energy Saving Potential Development
The amount of energy that can be saved can be estimated in the following ways:

Technical Potential
Technical Potential is the theoretical maximum amount of energy use that could be displaced by the
measures, only considering technical constraints. Non-technical constraints such as cost-effectiveness
and the willingness of end-users to adopt the efficiency measures are not considered. This study only
reports technical potential for the LED measure scenarios.

Economic Potential
Economic Potential is the subset of the Technical Potential that passes the Total Resource Cost (TRC)
test. The participants’ perspective is provided in the form of simple payback in years, but this calculation
is not used for screening measures. This study reports economic potential for all measures, except LEDs
for which technical potential is estimated.

Achievable Potential
Achievable Potential is the subset of Economic Potential that is realistically possible, considering market
barriers to adopt energy efficiency measures. This study does not estimate achievable potential.

Peak Demand Savings

Electric peak demand savings from energy conservation measures are modelled by applying load shape
assumptions to baseline sector consumption, as well as measure-level conservation potential.
There are three peak periods considered in this study, as follows:
Exhibit 47 – Peak Period Definitions
Peak Period Hours of the Day Days of the Week Months of the Year

Summer 1pm to 7pm weekdays June, July and August

Winter 6pm to 8pm weekdays January, February and December

Greenhouse Peak Hour Peak Hour Occurs in February. See definition below.

For this study, we defined ‘Greenhouse Peak Hour” as the hour with the highest predicted aggregate
electricity use in Essex region’s covered agriculture facilities; in other words, the one hour that uses
more electricity than any of the other 8,759 hours in the year. The greenhouse peak hour is coincident
with the peak lighting load at greenhouse facilities. In areas with high concentrations of greenhouses,
this greenhouse peak hour is impacting local transformer stations.

50
 2.2 Measures
The following table lists the energy saving measures considered in the analysis, including the applicable end use and fuels, which sub-sectors the
measure applies to, and energy savings estimates.
Exhibit 48 – Energy Efficiency Measures included in the Savings Potential Analysis
Sub-sector % Energy
Measure Name Measure Description End Use [Fuel]
Applicability Savings

LED Grow Lights Light Emitting Diode (LED) are energy efficient indoor grow lights to Lighting All 35% - 55%
replace high-pressure sodium (HPS) indoor grow lighting.

Energy Curtains Energy curtains installed in a greenhouse where none existed. Energy Space heating All greenhouses (not 30%
curtains are retractable barriers that offer shading (in summer) and [Natural gas, indoor cannabis or
heat retention benefits thereby resulting in energy savings and better biomass, oil] vertical farms)
control of the greenhouse environment.

Add VFDs to pumps Variable frequency drive (VFD) added to existing pump to match Pumping [Electricity] All 12%
motor output speed to the load requirement. The resulting benefit is
a reduced power consumption when full flow operation is not
required.

High efficiency High efficiency pump to replace an existing pump. Pumping [Electricity] All 43%
pumps

High efficiency High efficiency condensing hot water boiler system replacing an Space heating Vegetable: 100% of 8%
condensing hot existing non-condensing hot water boiler system. A high-efficiency [Natural gas] acreage
water boiler system condensing boiler has a heat exchanger to capture the latent heat of Flowers: 85% of
the flue gas and improve its overall combustion and thermal acreage (remaining
efficiency. 15% heat with unit
heaters)
Cannabis
Greenhouse: 100%
of acreage

51
 Sub-sector % Energy
Measure Name Measure Description End Use [Fuel]
Applicability Savings
Cannabis Indoor &
Vertical: n/a

Integrated Integrated environmental controller to replace a stand-alone control Space heating, Vegetable, Flowers, 15%
Environmental system. Integrated controller applications include control of VFDs, Pumping, Other Vertical Farming
Controls staging and control of exhaust fan speed, control of shade/thermal [Natural gas,
curtain operation, control of heat buffering systems, managing electricity]
climate including control of zone pumps, mixing valves, and heating &
ventilation equipment, and managing irrigation.

Drip irrigation Drip irrigation system to replace a standard irrigation system. Drip Pumping [Electricity] All 3%
irrigation systems deliver water slowly to the roots of plants,
minimizing evaporation compared to standard systems. In addition to
energy savings, this measure is estimated to result in 40% water
savings.

Envelope Envelope improvements to an in-situ greenhouse, including increasing Space heating All sectors 30%
improvements air-tightness, applying insulation and using more energy efficient [Natural gas,
glazing material. biomass, oil]

Combined Heat and Installation of a gas-fired turbine or reciprocating engine to generate Lighting, Space Flowers 2.92
Power – Flower electricity. This electricity can offset the lighting load in a flower Heating [Electricity, kWh/ft2/yr;
Greenhouses greenhouse. Waste heat produced during the combustion process can natural gas]
0.0005
offset the heating load, and CO2 in the exhaust can be captured and
kW/ft2;
injected into the growing area. This measure results in electricity
savings, but a net increase in gas consumption. % heat
displaced:
23%

Combined Heat and Installation of a gas-fired turbine or reciprocating engine to generate Lighting, Space Vegetables 10.85
Power - Vegetable electricity. This electricity can offset the lighting load in a vegetable Heating [Electricity, kWh/ft2/yr;
Greenhouses greenhouse. Waste heat produced during the combustion process can natural gas]
offset the heating load, and CO2 in the exhaust can be captured and

52
 Sub-sector % Energy
Measure Name Measure Description End Use [Fuel]
Applicability Savings
injected into the growing area. This measure results in electricity 0.0016
savings, but a net increase in gas consumption. kW/ft2;
% heat
displaced:
18%

Combined Heat and Installation of a gas-fired turbine or reciprocating engine to generate Lighting, Space Cannabis Indoor 94.07
Power - Cannabis electricity. This electricity can offset the lighting load in an indoor Heating [Electricity, kWh/ft2/yr;
Indoor cannabis facility. Waste heat produced during the combustion process natural gas]
0.0153
can offset the heating load, and CO2 in the exhaust can be captured
kW/ft2;
and injected into the growing area. This measure results in electricity
savings, but a net increase in gas consumption. % heat
displaced:
56%

Combined Heat and Installation of a gas-fired turbine or reciprocating engine to generate Lighting, Space Cannabis 50.81
Power - Cannabis electricity. This electricity can offset the lighting load in a cannabis Heating [Electricity, Greenhouse kWh/ft2/yr;
Greenhouses greenhouse. Waste heat produced during the combustion process can natural gas]
0.0100
offset the heating load, and CO2 in the exhaust can be captured and
kW/ft2;
injected into the growing area. This measure results in electricity
savings, but a net increase in gas consumption. % heat
displaced:
69%

Condensing Unit Condensing unit heater to replace a non-condensing unit heater. Space heating Flowers: 15% of 11%
Heater Condensing unit heaters have two heat exchangers: a primary non- [natural gas] acreage
condensing heat exchanger, and a secondary heat exchanger where Vegetable, Cannabis
waste heat from flue gases is recovered. (Indoor &
Greenhouse),
Vertical: n/a

53
 Sub-sector % Energy
Measure Name Measure Description End Use [Fuel]
Applicability Savings

High Efficiency High efficiency circulation fan to replace a standard efficiency fan. Other [Electricity] All 13%
Circulation Fans High efficiency circulation fans have higher cfm/watt ratings
(Ventilating Efficiency Ratio or VER) compared to standard efficiency
fans.

VFD equipped Variable frequency drive (VFD) added to existing exhaust fan to match Other [Electricity] All 12%
exhaust fans motor output speed to the load requirement. VFD allows fan to
operate at variable loads instead of at full power all the time.

Docking Seals Docking seals are fabric-covered foam pads that reduce heat loss from Space heating, Air All (space heating) 2% space
greenhouse or indoor cannabis facility loading areas. The foam pads Conditioning heating;
Cannabis Indoor (air
compress when a trailer backs into them, which creates a tight seal [Natural gas,
conditioning) 0.5% air
around the sides of the trailer and closes the gaps between the biomass, oil,
conditioning
trailer’s door hinges. electricity]

Optimizing HVAC This measure has been developed as a proxy to highlight the Space heating, air Cannabis 10% space
for Cannabis magnitude of the of HVAC retrofit opportunity for cannabis facilities. conditioning Greenhouse heating;
These facilities each have unique HVAC characteristics, and require a [Natural gas, Cannabis Indoor
30% air
bespoke approach to optimize, re-design, or enhance existing electricity]
conditioning
systems. Cooling, heating, and dehumidification requirements vary
significantly across growth stages, and differ notably compared to
vegetable and flower operations. Equipment set-up and selection also
differs significantly. This measure represents opportunity for
improved design and operation of HVAC equipment.

54
 Sub-Sector Focus:
Vegetables & Fruits

55
3 Sub-Sector Focus: Vegetables & Fruits
3.1 Sub-sector Description
Vegetable and fruit greenhouses (referred to as the ‘vegetable’ sub-sector in this report) is the largest
and fastest growing sub-sector of the horticulture sector in Canada [7]. As of 2017, most of the
greenhouse acreage in Ontario produced vegetables. The main vegetable crops are tomatoes, peppers
and cucumbers which account for almost 98% of total vegetable harvest, with each accounting for about
one-third of vegetable production [8]. Other vegetable crops include lettuce, eggplant and herbs. Some
fruits are produced in greenhouses, including a variety of berries [9].
The 2018 farm gate value from greenhouse vegetables was $947 million [43], with more than 70% of
produce exported to the U.S. [8]. In 2016, the export value of greenhouse vegetables was the highest of
all fresh produce exports, accounting for about 40% of all fresh produce exports from Canada [7].
This sub-sector is concentrated in the Essex region. Of the 224 members of the Ontario Greenhouse
Vegetable Grower (OGVG) association, 85% are located in the Essex region [10]. Greenhouses are
concentrated in this area in part due to the warm climate (relative to the rest of Canada) and close
proximity to the U.S. [10].
Exhibit 49 – Map of Vegetable Greenhouse Concentration by Region [44]

Greenhouses used for these crops tend to have glass or polyethylene roofing, use energy screen
systems, and heat with centralized steam or hot water systems, including after-market condenser
systems. Ventilation is commonly done by opening the roof or sidewall vents and complemented with

56
fans [45]. Climate control is managed through integrated computer-controlled systems [46]. These
greenhouses are large natural gas consumers with their major end-uses being space heating.
In the past, vegetable greenhouses typically did not use supplemental grow lighting, but this is beginning
to change with growers looking to increase production to meet increasing demand. Lit vegetable
greenhouses tend to consume a significant amount of electricity, and existing greenhouses introducing
grow lighting is expected to be a significant driver of electricity growth in this sector over the next six
years.
Exhibit 50 – Share of Greenhouse Vegetable Production by Province (2015) [47]

3.2 Base Year (2018) Results

Exhibit 51 shows the proportion of base year floor area by region for the vegetable sub-sector. In 2018
there was 111.9 million ft2 (2,570 acres) of vegetable greenhouses, with the majority located in Essex
County. The average vegetable greenhouse in Essex and Chatham-Kent is 9 times larger than the
average in the rest of the province.
Exhibit 51 – 2018: Vegetable Sub-Sector Area by Region (%)

5% 12% 10%
Chatham-Kent
1%
County
Essex County

Haldimand-Norfolk
County
Niagara County

Rest of Ontario
72%

57
Exhibit 52 shows the number of lit and unlit facilities by region for the vegetable and fruit sub-sector in
the base year. Only 4% of the vegetable greenhouse area in 2018 had grow lighting.
Exhibit 52 – 2018: Number of Vegetable Greenhouses by Region and Lighting Status

450
Chatham-Kent County
400
Essex County
350
Haldimand-Norfolk
County
Number of Greenhouses

300
Niagara County
250
Rest of Ontario
200

150

100

50

-
Unlit Lit

58
Exhibit 53 shows annual energy consumption (unit energy consumption or UEC) by end use for a typical
lit vegetable greenhouse and unlit vegetable greenhouse. A lit vegetable greenhouse consumes ten times
as much electricity as an unlit vegetable greenhouse (30.94 ekWh/ft2 vs. 3.18 ekWh/ft2) with essentially
all the additional electricity used for lighting.
Exhibit 53 – UEC Values by End Use and Lighting Status
UEC Value (ekWh/ft2)

Lit Vegetable/Fruit Unlit Vegetable/Fruit

End Use
Greenhouse Greenhouse

Heating 42.01 42.01

Lighting 27.86 0.10

Pumping 1.82 1.82

Other 1.26 1.26

59
Exhibit 54 shows base year energy consumption by region and fuel for the vegetable and fruit sub-
sector. It is estimated 4 MW of behind the meter tri-generation is installed in Essex County (the only
region with tri-generation in the base year).
Exhibit 54 – 2018: Vegetable Sub-Sector Annual Energy Consumption by Region and Fuel

4,000,000
Annual Enery Consumption (MWh/yr. or eMWh/yr.)

Onsite Electricity Generation

3,500,000 Oil
3,000,000 Natural Gas
2,500,000 Grid Electricity
Cogeneration Heat
2,000,000
Biomass
1,500,000

1,000,000

500,000

60
Exhibit 55 shows the base year energy consumption by end-use and fuel for the vegetable and fruit sub-
sector.
Exhibit 55 – 2018: Vegetable Sub-sector Energy Consumption by End-Use and Fuel

4,500,000
Watering
Annual Energy Consumption (MWh/yr. or eMWh/yr.)

4,000,000
Space Heating
3,500,000
Lighting
3,000,000
Irrigation and Circulation
2,500,000 Pumps
Generation
2,000,000

1,500,000 Air Conditioning

1,000,000 Other

500,000

3.2.1 Load Profiles

Load profiles for vegetable greenhouses were developed by the study team using the following data
sources:
• Hourly electricity consumption data for 326 greenhouse customers for 2016 and 2017 provided by
Hydro One
• Hourly gas consumption data for 125 greenhouse customers for 2017 provided by Enbridge Gas
• The load shape of a lit greenhouse was provided by the IESO based on hourly data from four lit
vegetable greenhouses.
Based on these data sources, the load profiles presented below represent a “typical” load profile based
on the data sources. Load profiles for specific facilities may differ3.

3
The study team recommends that a sample of greenhouses be sub-metered to capture end-use specific load
shapes, particularly for lighting, to make the load profile analysis more accurate in the future.

61
Lit Vegetable Greenhouse Load Profiles
Exhibit 56 displays the load profile of monthly electricity consumption in a lit, vegetable greenhouse as a
percentage of annual consumption. January is the month with the highest electricity consumption while
the summer months have the lowest.
Exhibit 56 – Electricity Monthly Load Profile (% of annual) for Lit Vegetable Greenhouse

16%
14%
Annual Consumption by Month (%)

12%
10%
8%
6%
4%
2%
0%

62
Exhibit 57 shows the load profile of daily electricity consumption for a lit vegetable greenhouse as a
percentage of daily consumption.
Exhibit 57 – Electricity Hourly (% of day) Load Profile for Lit Vegetable Greenhouse
8%

Annual Consumption by Hour (% of Total) 7%

6%

5%

4%

3%

2%

1%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the Day

Exhibit 58 illustrates the hourly lighting end-use load profile as a percentage of daily consumption. The
lighting load peaks in the morning.
Exhibit 58 – Lighting Hourly (% of day) Load Profile for Lit Vegetable Greenhouse

8%

7%
Consumption by Hour (% of Total)

6%

5%

4%

3%

2%

1%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the Day

63
Unlit Vegetable Greenhouse Load Profiles
Exhibit 59 provides the load profile for an unlit vegetable greenhouse of monthly electricity
consumption as a percentage of annual electricity consumption. August has the highest relative
consumption of electricity.
Exhibit 59 – Electricity Monthly Load Profile (% of annual) for Unlit Vegetable Greenhouse

12%
Annual Consumption by Month (%)

10%

8%

6%

4%

2%

0%

Exhibit 60 shows the load profile of daily electricity consumption for an unlit vegetable greenhouse as a
percentage of daily consumption.
Exhibit 60 – Electricity Hourly (% of day) Load Profile for Unlit Vegetable Greenhouse

5%
Annual Consumption by Hour (% of Total)

4%

3%

2%

1%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the Day

64
 3.3 Reference Case (2019-2024) Forecast Results
Exhibit 61 shows the reference case floor area forecast by region for the vegetable sub-sector. The
vegetable sub-sector is forecast to grow by 5% per year for all regions over the next six years (1% of this
is expected to be new account growth and the other 4% is expansions of existing facilities).
Essex County is an exception, growing at an average of 9% year over year during the reference period.
Due to a high number of connection requests in the area, growth is expected to follow the IESO’s
electricity demand growth forecast.
Exhibit 61 – Vegetable Sub-Sector: Forecasted Total Area (sq. ft.) By Region

200,000,000
180,000,000
160,000,000
140,000,000
Area (sq. ft.)

120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
-
2018 2019 2020 2021 2022 2023 2024
Chatham-Kent County Essex County
Haldimand-Norfolk County Niagara County
Rest of Ontario

65
Exhibit 62 shows the reference case forecast for the number of lit and unlit facilities by region in the
vegetable and fruit sub-sector. The lit portion is expected to increase from 4% in 2018 to 8% by 2020 in
all regions except Essex, where the lit percentage increases to 29% by 2024 (existing growers adding
grow lighting is a significant contributor to the electricity demand forecast in the region).
Exhibit 62 – Vegetable Sub-Sector: Forecasted Number of Facilities by Region and Lighting Status
700 Rest of Ontario
Niagara County
Haldimand-Norfolk County
600
Essex County
Chatham-Kent County
500
Number of Greenhouses

400

300

200

100

-
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Unlit Lit

66
Exhibit 63 shows the reference case energy consumption forecast by fuel for the vegetable and fruit
sub-sector. Total behind the meter tri-generation installed by end of reference case (2024) is expected
to be 17 MW.
Exhibit 63 – Vegetable Sub-Sector: Forecasted Annual Consumption by Fuel
10,000,000

9,000,000

8,000,000

7,000,000
Annual Enery Consumption
(MWh/yr. or eMWh/yr.)

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

-
2018 2019 2020 2021 2022 2023 2024

Biomass Cogeneration Heat Grid Electricity Natural Gas Oil Onsite Electricity Generation

67
Exhibit 64 shows the reference case energy consumption forecast by region for the vegetable sub-
sector.
Exhibit 64 – Vegetable Sub-Sector: Forecasted Annual Consumption by Region

10,000,000

9,000,000

8,000,000
Annual Energy Consumption

7,000,000
(MWh/yr. or eMWh/yr.)

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

68
Exhibit 65 shows the forecasted electricity (MWh) consumption by region for the vegetable sub-sector.
The Vegetable and Fruits sub-sector consumed about 473,000 MWh of electricity in 2018. Electricity
consumption from this sub-sector is expected to increase by 282% in the next five years (to 1,808,000
MWh in 2024). This increase in electricity is driven by growth in square footage and the addition of
supplemental lighting.
Significant growth is electricity consumption is expected, notably:
• In 2018, the covered agriculture sector in Essex county consumed almost 0.4 TWh of electricity; it
is forecasted to consume about 1.8 TWh of electricity in 2024, a 351% increase.
• In 2018, the covered agriculture sector in Chatham-Kent county consumed more than 69 MWh of
electricity; it is forecasted to consume more than 384 MWh of electricity in 2024, a 455% increase.

Exhibit 65 - Vegetable Sub-Sector: Forecasted Electricity Consumption by Region

2,000,000

1,800,000
Annual Electricity Consumption (MWh/yr. )

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

69
 3.4 Energy Saving Opportunities
Opportunity for LED Grow Lights
[Please see Section 11.1 for a more fulsome discussion of LED Grow Lights and the sensitivity analysis
that was performed for this study.]
LED grow lights offer electricity savings potential when they replace HPS lights. Despite the energy
saving potential, LED grow lights currently have a small saturation in the Ontario covered agriculture
sector. Growers are hesitant to adopt LEDs due to:
• Uncertainty over savings – savings claims being made by lighting suppliers have been at
odds with published research [48] [49]
• Higher upfront costs -- the cost of agricultural LED products still varies widely and is
expected to come down in the coming years as the technology continues to mature [48].
• Risk of impacting yield -- there is a learning curve required for growers to switch from HPS
to LED, creating a barrier that growers tend not be willing to accept given the relative
immaturity of the technology [50]
To illustrate the potential savings if/when LEDs are more widely adopted by the industry, two LED
measure scenarios were modelled relative to the reference case:
a) “LED Grow Lights A” -- 55% savings at a cost point of $1.25/installed LED watt (a mid-range cost
value) [48]
b) “LED Grow Lights B” -- 35% savings at a cost point of $0.75/installed LED watt (the lowest cost
point reported in Ontario to date) [48]

70
The technical energy savings potential4 results for the vegetables sub-sector are presented in Exhibit
66.
Exhibit 66 – Vegetable Sub-sector: Technical Energy Savings Potential from LED Measure Scenarios

400,000

350,000
Annual Energy Savings (MWh/yr.)

300,000

250,000

200,000

150,000

100,000

50,000

0
2019 2020 2021 2022 2023 2024

LED Grow Lights A LED Grow Lights B

Non-Lighting Electricity Savings Potential

Exhibit 67 shows the electricity savings potential for non-lighting measures that passed the economic
screen that apply to the vegetable greenhouse sub-sector (lit and unlit). Adding variable frequency
drives (VFDs) to fans is the measure that offers the most electricity savings potential, followed by adding
VFDs to pumps.

4
Technical Potential is the theoretical maximum amount of energy use that could be displaced by the measures,
only considering technical constraints. Non-technical constraints such as cost-effectiveness and the willingness of
end-users to adopt the efficiency measures are not considered.

71
 Exhibit 67 – Vegetable Sub-Sector: Electricity Savings Potential by Measure (lit and unlit greenhouses)

30,000 Add VFDs to Pumps

Add VFDs to Fans

25,000
Annual Energy Savings (MWh/yr.)

20,000

15,000

10,000

5,000

0
2019 2020 2021 2022 2023 2024

The Vineland Research and Innovation Centre has a Collaborative Greenhouse Technology Centre – a
40,000 square foot greenhouse dedicated to horticulture research. The Centre is researching how to
use robotics and automation technologies to handle and pack produce, conduct irrigation and detect
disease [51].

72
Exhibit 68 shows the electricity savings potential for lit vegetable greenhouses. In addition to adding
VFDs to pumps and fans, the CHP measure passes the economic screen for this segment of the
greenhouse sector due to the relatively high EUI for lighting in the lit vegetable greenhouse segment.
This is the only segment when CHP offers economic electricity savings potential (i.e., passes the TRC).
Exhibit 68 – Electricity Savings Potential by Measure for Lit Vegetable Greenhouses
450,000 Add VFDs to Pumps
Combined Heat and Power
400,000 Add VFDs to Fans

350,000
Annual Energy Savings (MWh/yr.)

300,000

250,000

200,000

150,000

100,000

50,000

0
2019 2020 2021 2022 2023 2024

Natural Gas Savings Potential

Exhibit 69 shows the savings potential for natural gas for the vegetable greenhouse sub-sector. Envelope
improvements offers the greatest economic savings potential, followed by condensing boilers and
docking deals.
Exhibit 69 – Natural Gas Savings Potential by Measure for Vegetable Greenhouse Sub-Sector
900,000

800,000

700,000
Annual Energy Savings (eMWh/yr.)

600,000
Condensing Boiler
500,000
Envelope
400,000 Improvements

Docking Seals
300,000

200,000

100,000

-
2019 2020 2021 2022 2023 2024

73
Sub-Sector Focus:
Flowers & Potted
Plants

74
4 Sub-Sector Focus: Flowers & Potted Plants
4.1 Sub-sector Description
The flower and potted plant sub-sector (referred to as the ‘flowers’ sub-sector in this report) grows
flowering potted plants, cut flowers, and bedding plants in greenhouses and hoop houses [5]. Ontario is
the third largest producer of greenhouse-grown flower products in North America, with a farm gate
value of $1.4 billion in 2012. The sub-sector in Ontario is concentrated in the Niagara region with a
mixture of large wholesale growers and smaller retail-oriented growers. Many flower growers only
operate 7.5 months of the year as winter offers lower consumer demand and higher energy costs [5].
Flowers greenhouses tend to be small operations (below the provincial average of 2 acres). Structures
typically have double layer polyethylene roofing, heat with gas-fired unit heaters and ventilate using
horizontal fans [46].
Exhibit 70 – Map of Flower and Potted Plant Greenhouses [52]

The flowers sub-sector has declined in recent years, both in terms of number of growers and total
acreage. The shrinkage in the sector is in part due to conversions of greenhouses to produce vegetables
or cannabis, fewer exports to the US [5], and changing consumer preferences [11] [53]. Sales of
greenhouse flowers and plants declined by about 2% between 2016 and 2017 in Ontario [1].

75
 4.2 Base Year (2018) Results
Exhibit 71 shows the proportion of base year floor area by region for the flowers sub-sector. In 2018
there was 39.6 million ft2 (910 acres) of flower greenhouses, with the Niagara region having the highest
concentration. The average flower greenhouse in Niagara and Haldimand-Haldimand–Norfolk is 2 times
larger than the average in the rest of the province.

Exhibit 71 – 2018: Flowers Sub-Sector Area by Region (%)

2%
6%
Essex County

34% 18% Chatham-Kent County

Haldimand-Norfolk
County
Niagara County

Rest of Ontario
40%

76
Exhibit 72 shows the number of lit and unlit facilities by region for the flowers sub-sector in the base
year. 75% of the greenhouse area in 2018 had grow lighting.
Exhibit 72 – 2018: Flowers Sub-Sector Number of Greenhouses by Region and Lighting Status

450
Essex County
400
Chatham-Kent
County
350
Haldimand-
Norfolk County
Number of Greenhouses

300
Niagara County
250
Rest of Ontario
200

150

100

50

-
Lit Unlit

Exhibit 73 shows annual energy consumption (unit energy consumption or UEC) by end use for a typical
lit flowers greenhouse and unlit flowers greenhouse. A lit flowers greenhouse consumes four times as
much electricity as an unlit vegetable greenhouse (25.52 ekWh/ft2 vs. 6.19 eKWh/ft2) with essentially all
the additional electricity used for lighting.

77
 Exhibit 73 – UEC Values by End Use and Lighting Status
UEC Value (ekWh/ft2)

Lit Flower Unlit Flower

End Use
Greenhouse Greenhouse

Heating 34.21 34.21

Lighting 19.15 0.15

Pumping 1.60 1.60

Other 4.77 4.77

Exhibit 74 shows base year energy consumption by region and fuel for the flowers sub-sector. It is
estimated 0.15 MW of behind the meter tri-generation is installed in the Niagara region (the only region
with tri-generation in the base year).
Exhibit 74 – 2018: Flowers Sub-Sector Energy Consumption by Region and Fuel

1,000,000 Onsite Electricity Generation

Annual Enery Consumption (MWh/yr. or eMWh/yr.)

900,000 Oil
800,000 Natural Gas
700,000 Grid Electricity
600,000 Cogeneration Heat
500,000 Biomass
400,000
300,000
200,000
100,000
-

78
Exhibit 75 shows the base year energy consumption by end-use and fuel for the flowers sub-sector.
Exhibit 75 – 2018: Flowers Energy Consumption by End Use and Fuel

1,400,000
Watering
Annual Energy Consumption (MWh/yr. or eMWh/yr.)

1,200,000 Space Heating

1,000,000 Lighting

Irrigation and
800,000
Circulation Pumps
Generation
600,000
Air Conditioning
400,000
Other
200,000

4.2.1 Load Profiles

Load profiles for flower greenhouses were developed by the study team using the following data
sources:
• Hourly electricity consumption data for two flower greenhouses for 2018 provided by Flowers
Canada Ontario.
• Hourly gas consumption data for 125 greenhouse customers for 2017 provided by Enbridge Gas.
• We used an equation to subtract a lit load shape from an unlit load shape to estimate the shape of
lighting. This was done using the data from Hydro One for the unlit shape and the data from
Flowers Canada for the lit shape5.

5
The study team recommends sub-metering to capture the end-use load shape, particularly for lighting, to make
the load profile analysis more accurate in the future.

79
The sample size to develop the load profiles for flower greenhouses was small and therefore these
profiles may not be representative of the sub-sector in general.

Lit Flower Greenhouse Load Profiles

Exhibit 76 shows the load profile of electricity consumption by month as a percent of annual total for a
lit flower greenhouse. March has the most consumption and June the least.
Exhibit 76 – Electricity Monthly Load Profile (% of annual) for Lit Flower Greenhouse

16%
Annual Consumption by Month (%)

14%
12%
10%
8%
6%
4%
2%
0%

Exhibit 77 displays the load profile of hourly electricity consumption as a percentage of the daily total
for a lit flower greenhouse.
Exhibit 77 – Electricity Hourly (% of day) Load Profile for Lit Flower Greenhouse
7%

6%
Annual Consumption by Hour (% of Total)

5%

4%

3%

2%

1%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the Day

80
Exhibit 78 shows the hourly lighting end-use load profile as a percentage of daily consumption for a lit
flower greenhouse.
Exhibit 78 – Lighting Hourly (% of day) Load Profile for Lit Flower Greenhouse
7%

6%
Consumption by Hour (% of Total)

5%

4%

3%

2%

1%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the Day

Unlit Flower Greenhouse Load Profiles

Exhibit 79 shows the load profile of electricity consumption by month as a percent of annual total for an
unlit flower greenhouse. This load profile is flatter than the same load profile for a lit flower greenhouse.
Exhibit 79 – Electricity Monthly Load Profile (% of annual) for Unlit Flower Greenhouse

12%
Annual Consumption by Month (%)

10%

8%

6%

4%

2%

0%

81
Exhibit 80 displays the load profile of hourly electricity consumption as a percentage of the daily total
for an unlit flower greenhouse. This load profile is flatter relative to the same load profile for a lit flower
greenhouse.
Exhibit 80 – Electricity Hourly (% of day) Load Profile for Unlit Flower Greenhouse

5%
Annual Consumption by Hour (% of Total)

4%

3%

2%

1%

0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the Day

82
 4.3 Reference Case (2019-2024) Forecast Results
Exhibit 81 shows the reference case floor area forecast by region for the flowers sub-sector. The flowers
sector is forecasted to grow by increasing the size of existing facilities by 1% per year in Niagara region
and 0.5% per year for all other regions.
Exhibit 81 – Flowers Sub-Sector: Forecasted Total Area (sq. ft.) by Region

45,000,000
40,000,000
35,000,000
30,000,000
Area (sq. ft.)

25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

83
Exhibit 82 shows the reference case forecast for the number of lit and unlit facilities by region in the
flowers sub-sector. The lit portion is expected to remain the same at 75% over the next six years.
Exhibit 82 – Flowers Sub-Sector: Forecasted Number of Greenhouses by Region and Lighting Status
700

600

500
Number of Greenhouses

400

300

200

100

-
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Unlit Lit
Essex County Chatham-Kent County Haldimand-Norfolk County Niagara County Rest of Ontario

84
Exhibit 83 shows the reference case annual energy consumption forecast by fuel for the flowers sub-
sector. Total behind the meter tri-generation installed by end of reference case (2024) is expected to be
11 MW.
Exhibit 83 – Flowers Sub-Sector: Forecasted Annual Consumption by Fuel

2,500,000

2,000,000
Annual Enery Consumption
(MWh/yr. or eMWh/yr.)

1,500,000

1,000,000

500,000

-
2018 2019 2020 2021 2022 2023 2024

Biomass Cogeneration Heat Grid Electricity Natural Gas Oil Onsite Electricity Generation

85
Exhibit 84 shows the reference case energy consumption forecast by region for the flowers sub-sector.
Exhibit 84 – Flowers Sub-Sector: Forecasted Energy Consumption by Region

2,500,000

2,000,000
Annual Energy Consumption
(MWh/yr. or eMWh/yr.)

1,500,000

1,000,000

500,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County Haldimand-Norfolk County Niagara County Rest of Ontario

Exhibit 85 presents the forecast in electricity consumption (MWh) for the flowers sub-sector by region.
Exhibit 85 – Flowers Sub-sector: Forecasted Electricity Consumption by Region
1,000,000

900,000
Annual Electricity Consumption (MWh/yr.)

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County Haldimand-Norfolk County Niagara County Rest of Ontario

86
 4.4 Energy Saving Opportunities
Opportunity for LED Grow Lights
[Please see Section 11.1 for a more fulsome discussion of LED Grow Lights and the sensitivity analysis
that was performed for this study.]
LED grow lights offer electricity savings potential when they replace HPS lights. Despite the energy
saving potential, LED grow lights currently have a small saturation in the Ontario covered agriculture
sector. Growers are hesitant to adopt LEDs due to:
• Uncertainty over savings – savings claims being made by lighting suppliers have been at
odds with published research [48] [49]
• Higher upfront costs -- the cost of agricultural LED products still varies widely and is
expected to come down in the coming years as the technology continues to mature [48].
• Risk of impacting yield -- there is a learning curve required for growers to switch from HPS
to LED, creating a barrier that growers tend not be willing to accept given the relative
immaturity of the technology [50]
To illustrate the potential savings if/when LEDs are more widely adopted by the industry, two LED
measure scenarios were modelled relative to the reference case:
a) “LED Grow Lights A” -- 55% savings at a cost point of $1.25/installed LED watt (a mid-range cost
value) [48]
b) “LED Grow Lights B” -- 35% savings at a cost point of $0.75/installed LED watt (the lowest cost
point reported in Ontario to date) [48]
The technical energy savings potential6 results for the flowers sub-sector are presented in Exhibit 86.

6
Technical Potential is the theoretical maximum amount of energy use that could be displaced by the measures,
only considering technical constraints. Non-technical constraints such as cost-effectiveness and the willingness of
end-users to adopt the efficiency measures are not considered.

87
 Exhibit 86 – Flowers Sub-Sector: Technical Energy Savings Potential from LED Measure Scenarios

90,000

80,000
Annual Energy Savings (MWh/yr.)
70,000

60,000

50,000

40,000

30,000

20,000

10,000

-
2019 2020 2021 2022 2023 2024
LED Grow Lights A LED Grow Lights B

Non-Lighting Electricity Savings Potential

Exhibit 87 shows the economic savings potential for electricity non-lighting measures for the flower
greenhouse sub-sector. Adding VFDs to pumps was the only measure that passed the economic screen
for this sub-sector.
Exhibit 87 – Flower Sub-Sector: Electricity Savings Potential by Measure

4,500

4,000
Annual Energy Savings (MWh/yr.)

3,500

3,000

2,500

2,000

1,500

1,000

500

0
2019 2020 2021 2022 2023 2024
Add VFDs to Pumps

88
Natural Gas Savings Potential
Exhibit 88 displays the economic savings potential for natural gas for the flower greenhouse sub-sector
by measure. Similar to vegetable greenhouses, envelope improvements offer the most economic
savings, followed by condensing boiler, condensing unit heater and docking seals.
Exhibit 88 – Flowers Sub-Sector: Natural Gas Savings Potential by Measure

140,000

120,000
Annaul Energy Savings (eMh/yr.)

100,000

80,000

60,000

40,000

20,000

-
2019 2020 2021 2022 2023 2024
Condensing Boiler Envelope Improvements
Condensing Unit Heater Docking Seals

89
Cannabis Sector

90
5 Cannabis Sector
5.1 Cannabis in Canada
Producers licensed by Health Canada have been able to
grow marijuana for medicinal purposes since 2014 in Niagara College now offers a
Canada. Cannabis was federally legalized for recreational Commercial Cannabis Production
use in the fall of 2018, thereby enabling a new market of program through their school of
legal cannabis production across Canada. Currently, dried Environment and Horticulture. The one-
and fresh cannabis, cannabis oils, and cannabis seeds are year program provides “training in the
legal for purchase. Edibles, topicals and extract products biology and cultural practices of
are set to be legally available in the fall of 2019 [55]. The cannabis production including plant
edible market is expected to be significant, with estimates nutrition, environment, lighting, climate
that six out of ten cannabis users will choose edible control, pest control and cultivar
products once they are legal [55, p. 18]. selection.” [54]

5.2 Cannabis in Ontario

Sales of recreational cannabis in the province are projected to be $930 million in 2019 and go up to
$2.38 billion in 2021 [56]. Currently, the Ontario cannabis market supports about 5,700 jobs, of which
58% are in the agricultural sector [55, p. 15]. Although supply was unable to meet demand when the
online legal market was launched, the sector is expected to be able to meet demand by 2020 [6] and
Ontario is projected to be the largest cannabis market in Canada [6].
Exhibit 89 – Map of Cannabis Facilities (Greenhouse and Indoor) in Ontario [57]

91
Field production (i.e., cannabis grown outdoors) is currently rare in Ontario and therefore excluded from
this study. However, field operations are expected to develop in the province.

Outdoor cultivation of cannabis is currently limited in Ontario but is expected to increase in the
province as it is now legal, and licenses have been distributed. Outdoor farming offers lower
production costs to growers, however, presents greater risks from an uncontrolled environment. The
cost of cannabis is projected to fall in Ontario as the market matures and outdoor operations are
expected to increase to provide a lower cost per gram of production [58].

Exhibit 90 – Canada’s Recreational Cannabis Market Sales [59, p. 5]

The Atmospheric Fund (TAF) created the Low Carbon Cannabis Canada initiative in April of 2018. The
initiative engages provincial governments across Canada, growers and former police chiefs to help the
industry lower GHG emissions from cannabis cultivation [60].

92
 5.2.1 Base Year (2018) Results
Exhibit 91 displays the breakdown of area (square feet) of the cannabis sector between greenhouse and
indoor facilities. The majority of area for cannabis production in 2018 is in greenhouses (65%) compared
to indoor facilities (35%).
Exhibit 91 – 2018: Cannabis Area (sq. ft.) by Sub-sector

3,586,350 Greenhouse
35% Cannabis
6,636,049 Indoor
65% Cannabis

Exhibit 92 shows that in 2018, there are significantly more greenhouses producing cannabis than indoor
facilities.
Exhibit 92 – 2018: Number of Cannabis Facilities by Sub-sector

350
300
Number of Facilities

250
200
150
100
50
-
2018
Greenhouse Cannabis Indoor Cannabis

Exhibit 93 shows the area of the cannabis sector (square feet) by region, for greenhouse cannabis and
indoor cannabis. Aside from the Rest of Ontario, most of the greenhouse cannabis are in Chatham-Kent
and Essex regions, while the majority of area of indoor cannabis is in Niagara County.

93
 Exhibit 93 – 2018: Cannabis Area (sq. ft.) by Region

4,000,000

3,500,000

3,000,000
Essex County
ARea (sq. ft.)

2,500,000

2,000,000 Chatham-Kent County

Haldimand-Norfolk County
1,500,000
Niagara County
1,000,000
Rest of Ontario
500,000

-
Greenhouse Indoor Cannabis
Cannabis

Exhibit 94 presents the end use breakdown estimated for the base year for the cannabis sector. Lighting
consumes the most energy relative to other end uses in indoor cannabis facilities. Heating (gas) is the
most energy intensive end use compared to other end uses in greenhouse cannabis facilities.
Exhibit 94 – 2018: End Use Breakdown by Cannabis Sub-sector

70
Energy Use Intensity (ekWh/sq. ft.)

60

50

40

30

20

10

0
Heating Heating Lighting Cooling Pumps Other
(gas) (elec)
Greenhouse Cannabis - Lit Indoor Cannabis

94
 5.2.2 Reference Case (2019-2024) Forecast
Exhibit 95 shows the projected increase in total area (square footage) of the cannabis sector during the
reference case. The total area for the cannabis sector is projected to increase by almost 50% during the
forecast period. In 2018 approximately 10% of the cannabis facility area was planted and growing
product; the portion of facility space under production increases to 100% by 2023.
Exhibit 95 – 2018-2024: Total Area (sq. ft.) and % Under Production of the Cannabis Sector

16,000,000 100%
14,000,000
80%
12,000,000
Area (sq. ft.)

10,000,000 60%
8,000,000
6,000,000 40%
4,000,000
20%
2,000,000
- 0%
2018 2019 2020 2021 2022 2023 2024

Greenhouse Cannabis Indoor Cannabis

% Under Production

Exhibit 96 shows the projected increase in total area (square footage) of the cannabis sector by region.
The Chatham-Kent region has the highest relative growth.
Exhibit 96 – 2018-2024: Total Area (sq. ft.) of the Cannabis Sector by Region

16,000,000

14,000,000

12,000,000

10,000,000
Area (sq. f.t)

8,000,000

6,000,000

4,000,000

2,000,000

-
2018 2019 2020 2021 2022 2023 2024
Chatham-Kent County Essex County Haldimand-Norfolk County Niagara County Rest of Ontario

95
Exhibit 97 shows the projected increase in the number of facilities that produce cannabis. The number
of greenhouses producing cannabis is expecting to increase during the forecast period. There is only one
projected new indoor cannabis facility.
Exhibit 97 – 2018-2024: Number of Cannabis Facilities by Sub-sector

500
450
400
350
Number of Facilities

300
250
200
150
100
50
-
2018 2024
Greenhouse Cannabis Indoor Cannabis

96
Exhibit 98 displays the projected annual energy consumption (eMWh/yr.) for the cannabis sector. This
exhibit includes energy consumption from all fuels but excludes water consumption.
Exhibit 98 – 2019-2024: Annual Energy Consumption (eMWh/yr.) for the Cannabis Sector

2,000,000

1,800,000
Annaul Energy Consumption (eMWh/yr.)

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

-
2018 2019 2020 2021 2022 2023 2024
Greenhouse Cannabis Indoor Cannabis

97
Exhibit 99 shows the forecasted electricity consumption for the cannabis sector. The Cannabis sub-
sector (greenhouse and indoor facilities) consumed 93,000 MWh of electricity in 2018. In 2024, the sub-
sector is expected to consume 1,258,000 MWh of electricity – a 1253% increase. This is large increase in
consumption is because in 2018, only 10% of facility space was being used to produce cannabis. The
remaining square footage is assumed to be dormant as other products cannot be grown due to risk of
cross-contamination. The portion of facilities used for production is expected to ramp up quickly,
reaching 100% by 2023.
Exhibit 99- 2019-2024: Annual Electricity Consumption (MWh/yr.) for the Cannabis Sector

1,400,000

1,200,000
Annaul Electricity Consumption (MWh/yr.)

1,000,000

800,000

600,000

400,000

200,000

-
2018 2019 2020 2021 2022 2023 2024
Greenhouse Cannabis Indoor Cannabis

Sub-sector focused results are presented in the following two sections of the report.

98
 Sub-Sector Focus:
Greenhouse Cannabis

99
6 Sub-Sector Focus: Greenhouse Cannabis
Cannabis production in Ontario is split into two sub-sectors: greenhouse and indoor. This section
discusses cannabis grown in greenhouses and Section 7 focuses on cannabis grown indoors (i.e.,
warehouse).

6.1 Greenhouse Cannabis Sub-Sector Description

The legalization of recreational cannabis in the fall of 2018 enabled a new market of legal cannabis
production across Canada, including in Ontario. For the legal medicinal market, cannabis was typically
grown indoors. For the recreational market, many growers are choosing greenhouses instead. Cannabis
grown in greenhouses consume 37% less electricity than cannabis grown indoors, offering producers
cost savings. Greenhouses reduce the need for supplemental lighting and air conditioning – both of
which are required for indoor operations and are costly. As the price of legal cannabis declines,
producers will need to reduce operating costs to stay competitive [12]. Many greenhouse cannabis
producers purchased existing greenhouses – often growing flowers - and converted them to their
specific growing needs [50].

Ontario’s capabilities and expertise in the greenhouse agriculture sector represent a unique
opportunity for the Province to export skills and knowledge to the cannabis sector in other regions
across Canada and the U.S.

6.2 Base Year (2018) Results

Exhibit 100 shows the proportion of base year floor area by region for the cannabis greenhouse sub-
sector. In 2018 there was 6.6 million ft2 (910 acres) of cannabis greenhouses, with the Rest of Ontario
region having the highest concentration. The average cannabis greenhouse in Essex and Chatham-Kent
is 4.5 times larger than the average in the rest of the province.
Exhibit 100 – 2018: Greenhouse Cannabis Area by Region (%)

Chatham-Kent
13% County
Essex County
13%
Haldimand-Norfolk
County
3%
60% Niagara County
11%
Rest of Ontario

100
Exhibit 101 shows the number of lit and unlit facilities by region for the greenhouse cannabis sub-sector
in the base year. 90% of the greenhouse area in 2018 had grow lighting.
Exhibit 101 – 2018: Greenhouse Cannabis - Number of Facilities by Region and Lighting Status
300
Chatham-Kent County
Essex County
Haldimand-Norfolk County
250 Niagara County
Rest of Ontario

200
Number of Facilities

150

100

50

-
Lit Unlit

Exhibit 102 shows annual energy consumption (unit energy consumption or UEC) by end use for a typical
greenhouse cannabis facility:
Exhibit 102 – UEC Values by End Use (ekWh/ft2)
End Use Greenhouse
Cannabis - Lit

Heating (gas) 35.71

Heating (elec) 5.36

Lighting 35.79

Cooling 10.74

Pumps 3.88

Other 11.60

101
 The Cannabis PowerScore is an online energy benchmarking tool designed for cannabis producers.
Cultivators enter data online via a short survey and are compared to the national average within the
cultivation method. The free tool is offered by the Resource Innovation Institute [61].

Exhibit 103 shows base year energy consumption by region and fuel for the greenhouse cannabis sub-
sector. It is estimated 6 MW of behind the meter tri-generation is installed in the Essex, Haldimand–
Norfolk and the Rest of Ontario regions.
Exhibit 103 – 2018: Greenhouse Cannabis Energy Consumption by Region and Fuel
35,000.00
Annual Enery Consumption (MWh/yr. or eMWh/yr.)

30,000.00

25,000.00

20,000.00

15,000.00 Onsite Electricity Generation

Natural Gas
10,000.00 Grid Electricity
Cogeneration Heat
5,000.00

102
Exhibit 104 shows the base year energy consumption by end-use and fuel for the greenhouse cannabis
sub-sector. In 2018 approximately 8% of this greenhouse cannabis facility area is planted and growing
product. No production of other products occurs in the empty portions of those facilities, because of the
risk of contamination.
Exhibit 104 – 2018: Greenhouse Cannabis Energy Consumption by Fuel and End Use

35,000
Watering
Space Heating
30,000 Lighting
Annual Energy Consumption (MWh/yr. or eMWh/yr.)

Irrigation and Circulation Pumps

Generation
25,000
Air Conditioning
Other
20,000

15,000

10,000

5,000

-
Cogeneration Heat Grid Electricity Natural Gas Onsite Electricity
Generation

6.2.1 Load Profiles

Load profiles for greenhouse cannabis were developed by the study team using the following data
sources:
• Hourly electricity consumption data for 326 greenhouse customers for 2016 and 2017 provided by
Hydro One
• Hourly gas consumption data for 125 greenhouse customers for 2017 provided by Enbridge Gas
• The load shape of a lit cannabis greenhouse was provided by the IESO based on daily load shape
derived from conversations with cannabis growers about their operations. Note that the lighting
load profile of a specific facility may vary from the one presented in this report as lighting
strategies may vary.

103
Exhibit 105 shows the load profile of monthly electricity consumption in a Cannabis greenhouse as a
percentage of annual consumption. Electricity consumption is highest in the winter months and lowest
in the summer.
Exhibit 105 – Electricity Monthly Load Profile (% of Annual) for Cannabis Greenhouse

Exhibit 106 shows the load profile of hourly electricity consumption for cannabis greenhouse as a
percentage of daily consumption. The electricity load is the highest in the middle of the day.
Exhibit 106 – Electricity Hourly (% of day) Load Profile for Cannabis Greenhouse

104
Exhibit 107 displays the hourly lighting end-use load profile as a percentage of daily consumption for a
cannabis greenhouse. Unlike lit vegetable greenhouses, this load profile shows the majority of the
lighting load occurring during the day, from late morning to mid-afternoon.
Exhibit 107 – Lighting Hourly (% of day) Load Profile for Cannabis Greenhouse

105
 6.3 Reference Case (2019-2024) Forecast Results
Essex County is an exception, growing at an average of 9% year over year during the reference period.
Due to a high number of connection requests in the area, growth is expected to follow the IESO’s
electricity demand growth forecast.
Exhibit 108 shows the reference case floor area forecast by region for the greenhouse cannabis sub-
sector. Starting at 8% in 2018, the facility area that is planted and growing product is expected to be
built out quickly, with 100% being built out by 2023. In addition to this, the sub-sector is projected to
add another million ft2 a year in 2023 and 2024.
Essex County is an exception, growing at an average of 9% year over year during the reference period.
Due to a high number of connection requests in the area, growth is expected to follow the IESO’s
electricity demand growth forecast.
Exhibit 108 – Greenhouse Cannabis: Forecasted Total Area (ft2) by Region

10,000,000
9,000,000
8,000,000
7,000,000
Area (sq. ft.)

6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

106
Exhibit 109 shows the reference case forecast for the number of lit and unlit facilities by region in the
greenhouse cannabis sub-sector. The lit portion is expected to increase from 90% in 2018 to 100% by
2020 in all regions.
Exhibit 109 – Greenhouse Cannabis: Forecasted Number of Facilities by Region and Lighting Status
500

450

400

350
Number of Greenhouses

300

250

200

150

100

50

-
2018 2019 2018 2019 2020 2021 2022 2023 2024
Unlit Lit
Essex County Chatham-Kent County Haldimand-Norfolk County Niagara County Rest of Ontario

107
Exhibit 110 shows the reference case energy consumption forecast by fuel for the greenhouse cannabis
sub-sector. Total behind the meter tri-generation installed by end of reference case (2024) is expected
to be 36 MW.
Exhibit 110 – Greenhouse Cannabis: Forecasted Annual Consumption by Fuel
1,000,000

900,000

800,000

700,000
Annual Enery Consumption
(MWh/yr. or eMWh/yr.)

600,000

500,000

400,000

300,000

200,000

100,000

-
2018 2019 2020 2021 2022 2023 2024

Cogeneration Heat Grid Electricity Natural Gas Onsite Electricity Generation

108
Exhibit 111 shows the reference case energy consumption forecast by region for the greenhouse
cannabis sub-sector. Starting at 8% in 2018, the existing facility area that is planted and growing product
is expected to be built out quickly, with 45% built out in 2019, 65% by 2020, 75% by 2021, 85% by 2022
and 100% by 2023.
Exhibit 111 – Greenhouse Cannabis: Forecasted Annual Energy Consumption by Region

1,200,000

1,000,000
Annual Energy Consumption
(MWh/yr. or eMWh/yr.)

800,000

600,000

400,000

200,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

109
Exhibit 112 shows the projected annual electricity consumption (MWh/year) for the greenhouse
cannabis sub-sector. As explained above, the increase in electricity consumption is expected due to the
rapid ramp up of production in existing facilities such that all area is being used for production.
Exhibit 112 - Greenhouse Cannabis: Forecasted Annual Electricity Consumption by Region

700,000

600,000
Annual Electricity Consumption (MWh/yr.)

500,000

400,000

300,000

200,000

100,000

-
2018 2019 2020 2021 2022 2023 2024
Essex County Chatham-Kent County
Haldimand-Norfolk County Niagara County
Rest of Ontario

6.4 Energy Saving Opportunities

Opportunity for LED Grow Lights
[Please see Section 11.1 for a more fulsome discussion of LED Grow Lights and the sensitivity analysis
that was performed for this study.]
LED grow lights offer electricity savings potential when they replace HPS lights. Despite the energy
saving potential, LED grow lights currently have a small saturation in the Ontario covered agriculture
sector. Growers are hesitant to adopt LEDs due to:
• Uncertainty over savings – savings claims being made by lighting suppliers have been at
odds with published research [48] [49].
• Higher upfront costs -- the cost of agricultural LED products still varies widely and is
expected to come down in the coming years as the technology continues to mature [48].
• Risk of impacting yield -- there is a learning curve required for growers to switch from HPS
to LED, creating a barrier that growers tend not be willing to accept given the relative
immaturity of the technology [50].
To illustrate the potential savings if/when LEDs are more widely adopted by the industry, two LED
measure scenarios were modelled relative to the reference case:

110
 a) “LED Grow Lights A” -- 55% savings at a cost point of $1.25/installed LED watt (a mid-range cost
value) [48]
b) “LED Grow Lights B” -- 35% savings at a cost point of $0.75/installed LED watt (the lowest cost
point reported in Ontario to date) [48]
The technical energy savings potential7 results for the greenhouse cannabis sub-sector are presented in
Exhibit 113.
Exhibit 113 – Greenhouse Cannabis: Technical Energy Savings Potential from LED Measure Scenarios

70,000

60,000
Annual Energy Savings (MWh/yr.)

50,000

40,000

30,000

20,000

10,000

-
2019 2020 2021 2022 2023 2024
LED Grow Lights A LED Grow Lights B

7
Technical Potential is the theoretical maximum amount of energy use that could be displaced by the measures,
only considering technical constraints. Non-technical constraints such as cost-effectiveness and the willingness of
end-users to adopt the efficiency measures are not considered.

111
Non-Lighting Electricity Savings Potential
Exhibit 114 displays the economic savings potential for electricity non-lighting measures for the
greenhouse cannabis sub-sector. The optimize HVAC for cannabis measure offers the most potential,
followed by high efficiency pumps, envelope improvements, energy curtains and high efficiency
circulation fans.
Exhibit 114 – Greenhouse Cannabis: Electricity Savings Potential by Measure

50,000

45,000

40,000
Annual Electricity Savings (MWh/yr.)

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0
2019 2020 2021 2022 2023 2024
Energy Curtains Envelope Improvements
Optimize HVAC for Cannabis High Efficiency Pumps
High Efficiency Circulation Fans

112
Natural Gas Savings Potential
Exhibit 115 displays the economic savings potential for natural gas for the greenhouse cannabis sub-
sector for the top five measures. Envelope improvements is the measure that offers the most savings
potential by 2024, followed by energy curtains and optimize HVAC for cannabis.
Exhibit 115 – Natural Gas Savings Potential by Measure for the Greenhouse Cannabis Sub-sector

120,000

100,000
Annual Energy Savings (eMWh/yr.)

80,000

60,000

40,000

20,000

-
2019 2020 2021 2022 2023 2024
Energy Curtains Envelope Improvements
Optimize HVAC for Cannabis Condensing Boiler
Docking Seals

113
Sub-Sector Focus:
Indoor Cannabis

114
7 Sub-Sector Focus: Indoor Cannabis
7.1 Sub-sector Description
Ontario’s cannabis cultivation industry consists of both indoor and greenhouse operations. In its infancy,
Ontario’s industry consisted exclusively of indoor operations serving the medical market. Greenhouse
operations are a more recent development in Ontario; however, they have been part of the industry’s
progression in other jurisdictions with legal recreational markets. Ontario’s cannabis sector is rapidly
growing and is expected to continue to expand as the legal cannabis market matures.
Relative to greenhouse operations, indoor facilities provide a high degree of environmental control:
grow rooms are sealed from the outdoor environment with artificial light, heat and dehumidification
providing the optimal growing conditions. Indoor facilities tend to have high construction and operating
costs relative to greenhouse operations [62].
Energy use for indoor and greenhouse
cannabis cultivation varies, however
the same basic end uses are common
to both approaches. Major end-uses
include space heating, dehumidification
(broadly applicable in indoor
operations, usually limited to drying
rooms in greenhouse operations) and
grow lighting. Compared to the
vegetable sub-sector, cannabis
operations use significantly more
electricity (e.g., indoor cannabis
facilities use more almost 3.5 times
more electricity per square foot than lit
vegetable greenhouses), with some
facilities that have electricity demand
peaks in excess of 10MW.

7.2 Base Year (2018) Results

Exhibit 116 shows the proportion of base year floor area by region for the indoor cannabis sub-sector. In
2018 there was 3.6 million ft2 (82 acres) of indoor cannabis, with the Rest of Ontario region having the

115
highest concentration. The average indoor cannabis facility in Niagara is 3.5 times larger than the
average in the rest of the province.
Exhibit 116 – 2018: Indoor Cannabis Area (%.) by Region

0% 1%

7%

Chatham-Kent County

Haldimand-Norfolk
County
Niagara County

Rest of Ontario

92%

Exhibit 117 shows the number of indoor cannabis facilities by region. Only 6 (or 12%) of facilities are in
Chatham-Kent, Haldimand–Norfolk and Niagara regions.
Exhibit 117 – 2018: Indoor Cannabis Facilities by Region

2
4% 2
2 4%
4% Chatham-Kent County

Haldimand-Norfolk
County
Niagara County

Rest of Ontario
43
88%

Exhibit 118 shows annual energy consumption (unit energy consumption or UEC) by end use for a typical
indoor cannabis facility:

116
 Exhibit 118 – UEC Values by End Use (ekWh/ft2)
Indoor
End Use
Cannabis

Heating (gas) 32.29

Heating (elec) 4.20

Lighting 63.72

Cooling 19.12

Pumps 5.05

Other 15.11

Exhibit 119 shows base year energy consumption by region and fuel for the indoor cannabis sub-sector.
It is estimated 1.17 MW of behind the meter tri-generation is installed in the Rest of Ontario region (the
only region with tri-generation in the base year).
Exhibit 119 – 2018: Indoor Cannabis Energy Consumption by Region and Fuel

80,000.00
Annual Enery Consumption (MWh/yr. or eMWh/yr.)

70,000.00

60,000.00

50,000.00
Onsite Electricity Generation
40,000.00

Natural Gas
30,000.00

Grid Electricity
20,000.00

Cogeneration Heat
10,000.00

117
Exhibit 120 shows base year energy consumption by fuel and end-use for the indoor cannabis sub-
sector. In 2018 approximately 16% of the indoor cannabis facility area was planted and growing product.
No production of other products occurred in the empty portions of those facilities, because of the risk of
contamination.
Exhibit 120 – 2018: Indoor Cannabis Energy Consumption by Fuel and End Use

60,000
Space Heating

Lighting
50,000
Annual Energy Consumption (MWh/yr. or eMWh/yr.)

Irrigation and Circulation

Pumps
Generation
40,000
Air Conditioning

Other
30,000

20,000

10,000

-
Grid Electricity Natural Gas

7.2.1 Load Profiles

Load profiles for indoor cannabis were developed by the study team using the following method:
• We assumed an indoor cannabis facility had the same daily profile as a cannabis greenhouse and
the greenhouse winter profile was used for every month of the year. The cannabis greenhouse
load profile was provided by the IESO.
Note that the lighting load profile of a specific facility may vary from the one presented in this report as
lighting strategies may vary.

118
Exhibit 121 displays the load profile of monthly electricity consumption for an indoor cannabis facility as
a percentage of annual consumption. This load profile is relatively flat, as lighting is used year-round.
Exhibit 121 – Electricity Monthly Load Profile (% of Annual) for Indoor Cannabis

Exhibit 122 shows the load profile of hourly electricity consumption as a percentage of daily
consumption for an indoor cannabis facility. Similar to cannabis greenhouse, the electricity consumption
peaks during the day.
Exhibit 122 - Electricity Hourly (% of day) Load Profile for Indoor Cannabis

119
Exhibit 123 illustrates the hourly lighting end-use load profile as a percentage of daily consumption for
an indoor cannabis facility. The lighting load peaks during the day.
Exhibit 123 – Lighting Hourly (% of day) Load Profile for Indoor Cannabis

120
 7.3 Reference Case (2019-2024) Forecast Results
Exhibit 124 shows the reference case floor area forecast by region for the indoor cannabis sub-sector.
The proportion of area used for production was 16% in 2018. It is expected production will ramp up
quickly, with 100% of area being used for production by 2023. Beyond the growth in area used for
production, no new indoor cannabis facilities are expected to be constructed, except for the Chatham-
Kent region where a large indoor cannabis facility is coming online in 2020 (55% of the load is coming
online in 2020 and remaining part of the facility will come online in 2023).
Exhibit 124 – 2018-2024: Indoor Cannabis Total Area (sq. ft.) by Region

6,000,000

5,000,000

4,000,000
Area (sq. ft.)

3,000,000

2,000,000

1,000,000

-
2018 2019 2020 2021 2022 2023 2024
Chatham-Kent County Haldimand-Norfolk County
Niagara County Rest of Ontario

121
Exhibit 125 shows the reference case energy consumption forecast by fuel for the indoor cannabis sub-
sector. Total behind the meter tri-generation installed by end of reference case (2024) is expected to be
6 MW.
Exhibit 125 – Indoor Cannabis Forecasted Energy Consumption by Fuel

900,000

800,000

700,000
Annual Enery Consumption

600,000
(MWh/yr. or eMWh/yr.)

500,000

400,000

300,000

200,000

100,000

-
2018 2019 2020 2021 2022 2023 2024

Cogeneration Heat Grid Electricity Natural Gas Onsite Electricity Generation

122
Exhibit 126 shows the reference case energy consumption forecast by region for the indoor cannabis
sub-sector. The existing facility area that is planted and growing product is expected to be built out
quickly, with 45% built out in 2019, 65% by 2020, 75% by 2021, 85% by 2022 and 100% by 2023.
Exhibit 126 – 2018-2024: Indoor Cannabis Annual Energy Consumption by Region

800,000

700,000

600,000
Annual Energy Consumption
(MWh/yr. or eMWh/yr.)

500,000

400,000

300,000

200,000

100,000

-
2018 2019 2020 2021 2022 2023 2024
Chatham-Kent County Haldimand-Norfolk County Niagara County Rest of Ontario

123
Exhibit 127 provides the forecasted annual electricity consumption by region for the indoor cannabis
sub-sector.
Exhibit 127– 2018-2024: Indoor Cannabis Annual Electricity Consumption by Region
700,000

600,000
Annual Electricity Consumption (MWh/yr.)

500,000

400,000

300,000

200,000

100,000

-
2018 2019 2020 2021 2022 2023 2024
Chatham-Kent County Haldimand-Norfolk County Niagara County Rest of Ontario

7.4 Energy Saving Opportunities

Opportunity for LED Grow Lights
[Please see Section 11.1 for a more fulsome discussion of LED Grow Lights and the sensitivity analysis
that was performed for this study.]
LED grow lights offer electricity savings potential when they replace HPS lights. Despite the energy
saving potential, LED grow lights currently have a small saturation in the Ontario covered agriculture
sector. Growers are hesitant to adopt LEDs due to:
• Uncertainty over savings – savings claims being made by lighting suppliers have been at
odds with published research [48] [49]
• Higher upfront costs -- the cost of agricultural LED products still varies widely and is
expected to come down in the coming years as the technology continues to mature [48].
• Risk of impacting yield -- there is a learning curve required for growers to switch from HPS
to LED, creating a barrier that growers tend not be willing to accept given the relative
immaturity of the technology [50]
To illustrate the potential savings if/when LEDs are more widely adopted by the industry, two LED
measure scenarios were modelled relative to the reference case:
a) “LED Grow Lights A” -- 55% savings at a cost point of $1.25/installed LED watt (a mid-range cost
value) [48]

124
 b) “LED Grow Lights B” -- 35% savings at a cost point of $0.75/installed LED watt (the lowest cost
point reported in Ontario to date) [48]
The technical energy savings potential8 results for the indoor cannabis sub-sector are presented in
Exhibit 128.
Exhibit 128 – Indoor Cannabis: Technical Energy Savings Potential from LED Measure Scenarios
80,000

70,000
Annual Energy Savings (MWh/yr.)

60,000

50,000

40,000

30,000

20,000

10,000

-
2019 2020 2021 2022 2023 2024
LED Grow Lights A LED Grow Lights B

8
Technical Potential is the theoretical maximum amount of energy use that could be displaced by the measures,
only considering technical constraints. Non-technical constraints such as cost-effectiveness and the willingness of
end-users to adopt the efficiency measures are not considered.

125
Non-Lighting Electricity Savings Potential
Exhibit 129 shows the economic savings potential for electricity non-lighting measures for the indoor
cannabis sub-sector. The optimize HVAC for cannabis measure offers for greatest electricity savings,
followed by high efficiency circulation fans and adding VFDs to pumps.
Exhibit 129 – Electricity Savings Potential by Measure for Indoor Cannabis Sub-Sector

25,000

20,000
Annaul Energy Savings (MWh/yr.)

15,000

10,000

5,000

0
2019 2020 2021 2022 2023 2024
Add VFDs to Pumps Optimize HVAC for Cannabis High Efficiency Circulation Fans

Canopy Growth expected to need an additional powerline to expand their indoor cannabis
growing and processing facility in Smiths Falls. However, energy savings from efficiency
measures enabled the facility to proceed with the available grid capacity [63] [64].

126
Natural Gas Savings Potential
Exhibit 130 displays the economic savings potential for natural gas for the indoor cannabis sub-sector by
measure. Similar to the greenhouse cannabis sub-sector, envelope improvements offers the most
savings potential by 2024 relative to other measures. Optimize HVAC for cannabis and docking seals are
the other measures that offer economic natural gas savings potential.
Exhibit 130 – Natural Gas Savings Potential by Measure for Indoor Cannabis Sub-Sector

25,000

20,000
Annual Energy Savings (eMWh/yr.)

15,000

10,000

5,000

-
2019 2020 2021 2022 2023 2024
Envelope Improvements Docking Seals Optimize HVAC for Cannabis

127
Sub-Sector Focus:
Vertical Farming &
Other Covered
Agriculture

128
8 Sub-Sector Focus: Vertical Farming & Other Covered Agriculture
8.1 Sub-sector Description
Vertical farming is an indoor, closed production system where plants are grown vertically up the indoor
walls of the structure. Some vertical farms are in shipping containers, existing warehouses and other
commercial spaces. Indoor vertical farms use controlled environmental agriculture (CEA) systems to
grow high value crops such as leafy greens and herbs [65]. Vertical farms are often located in or nearer
to urban areas compared to greenhouses as their smaller size and controlled indoor environments free
them from geographic constraints. This sub-sector is currently small and still developing, and there is
some skepticism about the commercial viability of vertical farms9.
As vertical farms - like other indoor operations - are self-contained, closed systems, they require energy
to produce light and heat, making them energy intensive operations [66]. A 2017 US indoor farming
market report indicated its surveyed growers reported running their lights 16 hours per day, 7 days per
week, all year round. This compared to 9 hours per day in the winter for greenhouse growers [67, p. 24].

8.2 Base Year (2018) & Reference Case (2019-2024) Results

Exhibit 131 shows base year energy consumption by fuel for the vertical farming sub-sector. In 2018
there were only two vertical farm facilities representing a total area of 50 thousand ft2 (1.1 acres). Both
these facilities are located in the Rest of Ontario region. The number of facilities and footprint of the
vertical farming sub-sector is not expected to change notably over the next six years.
Exhibit 131 – 2018: Vertical Farming Annual Consumption by Fuel (MWh/yr. or eMWh/yr.)

1,614
24%

Grid Electricity
Natural Gas

5,150
76%

9
For a discussion of the potential for vertical farms, see, IEEE Spectrum, June 2018: The Green Promise of Vertical
Farms (https://spectrum.ieee.org/energy/environment/the-green-promise-of-vertical-farms) and The Guardian, 10
April 2015: The buzz around indoor farms and artificial lighting makes no sense
(https://www.theguardian.com/sustainable-business/2015/apr/10/indoor-farming-makes-no-economic-
environmental-sense)

129
Exhibit 132 shows the base year energy consumption by end-use and fuel for the vertical farming sub-
sector. The energy profile of the vertical farming sub-sector is not expected to change notably over the
next six years.
Exhibit 132 – 2018: Vertical Farming Energy Consumption by Fuel and End Use

6,000.00
Space Heating
Annual Energy Consumption (MWh/yr. or

5,000.00 Lighting

4,000.00 Irrigation and Circulation

Pumps
eMWh/yr.)

Air Conditioning
3,000.00
Other
2,000.00

1,000.00

-
Grid Electricity Natural Gas

8.3 Energy Saving Opportunities

Opportunity for LED Grow Lights
[Please see Section 11.1 for a more fulsome discussion of LED grow lights and the sensitivity analysis that
was performed for this study.]
LED grow lights offer electricity savings potential when they replace HPS lights. Despite the energy
saving potential, LED grow lights currently have a small saturation in the Ontario covered agriculture
sector. Growers are hesitant to adopt LEDs due to:
• Uncertainty over savings – savings claims being made by lighting suppliers have been at
odds with published research [48] [49]
• Higher upfront costs -- the cost of agricultural LED products still varies widely and is
expected to come down in the coming years as the technology continues to mature [48].
• Risk of impacting yield -- there is a learning curve required for growers to switch from HPS
to LED, creating a barrier that growers tend not be willing to accept given the relative
immaturity of the technology [50]
To illustrate the potential savings if/when LEDs are more widely adopted by the industry, two LED
measure scenarios were modelled relative to the reference case:
a) “LED Grow Lights A” -- 55% savings at a cost point of $1.25/installed LED watt (a mid-range cost
value) [48]

130
 b) “LED Grow Lights B” -- 35% savings at a cost point of $0.75/installed LED watt (the lowest cost
point reported in Ontario to date) [48]
The technical energy savings potential10 results for the Vertical Farming sub-sector are presented in
Exhibit 133.
Exhibit 133 – Vertical Farming: Technical Energy Savings Potential from LED Measure Scenarios

450
400
Annual Energy Savings (MWh/yr.)

350
300
250
200
150
100
50
-
2019 2020 2021 2022 2023 2024
LED Grow Lights A LED Grow Lights B

10
Technical Potential is the theoretical maximum amount of energy use that could be displaced by the measures,
only considering technical constraints. Non-technical constraints such as cost-effectiveness and the willingness of
end-users to adopt the efficiency measures are not considered.

131
Non-Lighting Electricity Savings Potential
Exhibit 134 shows the electricity savings potential for vertical farming non-lighting measures, with high
efficiency circulation fans being the only measure offering economic savings potential for this sub-
sector.
Exhibit 134 – Electricity Savings Potential by Measure for Vertical Farming Sub-Sector
18

16

14
Annual Energy Savings (eMWh/yr.)

12

10

0
2019 2020 2021 2022 2023 2024
High Efficiency Circulation Fans

Natural Gas Savings Potential

Exhibit 135 displays the economic savings potential for natural gas for the vertical farming sub-sector by
measure. Envelope improvements and docking seals offer the greatest savings potential for this sub-
sector.
Exhibit 135 – Natural Gas Savings Potential by Measure for Vertical Farming Sub-Sector
160 Envelope Improvements
Docking Seals

140

120
Annual Energy Savings (eMWh/yr.)

100

80

60

40

20

-
2019 2020 2021 2022 2023 2024

132
 Energy Saving
Incentive Programs

133
9 Energy Saving Incentive Programs
The provincial government discontinued the Conservation First Framework in March 2019 and replaced it with a new framework that has the
IESO centrally delivering energy efficiency programs across Ontario. As a result of this change, some Save on Energy programs were cancelled,
and some programs historically delivered by LDCs were centralized and are now administered by the IESO. The 2019-2020 interim framework
offers the following programs via the IESO: the Retrofit Program, Small Business Lighting, the Energy Manager Program, Process and System
Upgrades, Energy Performance Program, Home Assistance Program and energy-efficiency programming for Indigenous communities [68].
The following section provides an overview of the incentive programs applicable to the covered agricultural sector. The section also presents a
high-level analysis of historic participation from the greenhouse sector under the recently superseded Conservation First Framework.

9.1 Existing Incentive Programs

Exhibit 136 summarizes the existing incentive programs that greenhouse/indoor agriculture facilities may be eligible to receive.
Exhibit 136 – Incentive Programs Relevant to the Covered Agriculture Sector

Program Name & Administered Program Type & Eligible Sectors Eligible Projects and Applicants
Description (Funded) by Incentives

Process & Systems Save on • Project incentive: Industrial and Commercial • Incentives available for
Upgrade Program Energy (IESO) the lesser of up to implementing energy efficiency
(PSUP) 70% of project and electricity generation projects
costs, or; $200 per that are capital intensive.
The PSUP is designed to MWh of annual Incentives are also available for
help organizations with electricity savings engineering feasibility studies
complex systems and once opportunities and costs have
processes identify, been identified.
implement, and • Must be a single facility connected
validate energy to a local hydro company
efficiency projects from distribution network.
start to finish. • The project must be in
service before December 31, 2020

134
 Program Name & Administered Program Type & Eligible Sectors Eligible Projects and Applicants
Description (Funded) by Incentives
and provide annualized electricity
savings of at least 300 MWh
Retrofit Program Save on • Retrofit program: Commercial, Industrial, • Must provide sustainable,
Energy (IESO) up to 50% of Agricultural, or Institutional measurable and verifiable
Incentives available for project costs for reductions in electric peak
Facilities
energy saving customer projects, demand and/or electricity
equipment. or; fixed incentive consumption.
levels for • Prescriptive track: incentives
prescriptive available per unit of product;
projects projects must be pre-approved;
• Prescriptive track: small projects must be worth a
per unit incentives minimum incentive of a $500.
• Custom track: • Custom track: incentive amount
Incentives are based on energy savings
based on energy compared to pre-project baseline
savings over pre- & capped at 50% of project cost;
project baselines. minimum incentive of $1,500.
• Projects must deliver energy
savings for at least 48 months.
Industrial Conservation IESO Customers who Customers must have an NA
Initiative participate pay GA based average monthly peak
on their percentage demand greater than 500kW
The ICI is a demand
contribution to the top during an annual base period
response program that
five peak Ontario from May 1 to April 30;
allows participating
demand hours over a 12- customers with an average
customers to manage
month base period. peak demand above 5 MW
their global adjustment
automatically qualify as Class
(GA) costs by reducing
A customers (can opt out by
June 15 of each year).

135
 Program Name & Administered Program Type & Eligible Sectors Eligible Projects and Applicants
Description (Funded) by Incentives
electric peak demand
during peak periods.

Energy Manager Save on Incentive depends on Industrial and Commercial Incentive to hire a Certified Energy
Program Energy (IESO) the eligible organization Manager, and further leverage
incentive programs.
Incentives to help bring
an energy manager
onto a team.

9.1.1 Other Energy Efficiency Support Programs

Energy Training and Support programs
Industry can receive training and support for energy management through a Boulder County, Colorado has a Marijuana Energy
number of third-party training offerings, including the Dollars to $ense Energy Impact Offset Fund to help local cannabis producers to
Management Workshop and Certified Energy Manager training. In some cases, reduce the environmental impact of their operations.
eligible individuals and organizations can apply for funding through Save on Energy Commercial growers can offset their electricity use with
to participate in these training and support programs [70]. local renewable energy or be required to pay a fee per
Incentives to Reduce Natural Gas Consumption kWh. The fee is put into the Offset Fund to help growers
understand their energy use and find ways to reduce
Incentives are available from Enbridge to reduce natural gas consumption from their consumption, including from more efficient
space and water heating. Incentives are also available for engineering feasibility and lighting and ventilation systems [69].
process improvement studies [71]. Covered agriculture facilities are able to access
these incentives to lower their natural gas consumption and associated costs.

136
 9.2 Program Participation
Data from the IESO was analyzed to determine how many greenhouse operators participated in
programs and for what types of projects. The following subsections provide details of participation in
the PSUP and Retrofit program.
9.2.1 PSUP Program Participation
The following analysis is based on PSUP applications specifically from the agricultural sector as of
January 22, 2019.
Twelve projects in covered agriculture facilities from nine companies in sub-sectors in scope for this
study11 are actively12 participating in the PSUP program. Of these twelve projects, seven are in the
cannabis sub-sector. All projects were for tri-generation systems, except for one ventilation and
dehumidification upgrade project. The average estimated savings for the projects is 15,835 MWh, with
76,473 MWh being the highest estimated saving and 188 MWh being the smallest estimated savings.
The average incentive amount is $3,754,740 with $14,780,000 being the highest incentive provided and
$37,600 being the lowest incentive offered.
9.2.2 Retrofit Program Participation
The following analysis is based on Retrofit program applications specifically from the agricultural sector
as of November 15, 2018.
In 2017, 42 applications were submitted to the Retrofit program for greenhouse13 buildings and
accepted.14 In terms of measures, 60% of all projects were for lighting. In terms of project type, 88% of
all projects were for equipment efficiency upgrades.

11
Mushroom facilities were excluded from the application analyzed.
12
Applications were filtered for “active” or “in-service” activity type. “Inactive” and “potentially inactive” were
excluded.
13
The study team filtered for ‘greenhouse’ under building type; all others were excluded.
14
The study team filtered ‘In Quarterly Reporting’ for ‘Savings’ and excluded ‘rejected’ and ‘pipeline’.

137
Innovative &
Emerging
Technologies

138
10 Innovative & Emerging Technologies

Beyond the DSM opportunities discussed and analysed in detail in this study, there are several promising
innovative solutions Ontario’s covered agriculture sector
and energy supply planners will be paying close attention to In 2012, Truly Green Farms began a
in the coming years. Technological advances, as well as project to build a greenhouse to
advances in customization of technology for the covered produce tomatoes in Chatham-Kent.
agriculture sector, are being looked at to answer increasing The greenhouse will be built out in
energy demand in high density growing regions like Essex phases over ten years, eventually
County by applying innovative solutions for improved reaching 90 acres of production area.
flexibility, efficiency and reliability. This greenhouse will use waste heat
Covered agriculture growers have a long history of adoption and carbon dioxide from the nearby
of innovative practices and technologies and will continue GreenField Ethanol plant, thereby
to assess and adopt new solutions when sound business lowering heating costs by 40-50% while
cases can be substantiated. Exploration of a number of increasing production by 5%. The
promising technologies and energy solutions over the next provincial government provided $3.2
six years through increased research and pilot testing will million to help support the costs of this
be important to build credible business cases for DSM, to innovative project – the first of its kind
enable cost reduction and increased competitiveness, and in North America [72] [73] [74].
ensure energy reliability and resilience.
Greenhouse-integrated semi-transparent solar photovoltaics
Although this technology is not yet widely used in Ontario, research and testing is underway in other
countries including China [75], Japan [76] and Europe [77] to explore integrating solar photovoltaics into
roof and shade screen [78] applications.
Here in Ontario, Ecohive is working with Soliculture and Heliene to provide bifacial solar cell technology
to commercial greenhouses. Their “Greenhouse Integrated Photovoltaic Panels” are “designed to co-
utilize the greenhouse roof for both positive crop growth and clean solar power production” [79].

139
 Exhibit 137 – Cross-Sectional Structure of Typical Solar PV Panel Compared to Semi-Transparent Panel [76]

Seasonal thermal energy storage assisted ground-source heat pump

Solar assisted ground-source heat pumps (SAGSHP) systems look to have promising potential for the
Ontario greenhouse sector in the future based on recent research undertaken by the University of
Windsor.
“In heating dominated buildings utilizing a ground-source system, annual heat abstraction exceeding
heat injection can lead to a decrease in mean ground temperature over time and decreased system
coefficient of performance. With a solar-assisted system, solar energy harvested is used for ground
recharge and increasing the source fluid temperature entering the heat pump.” [80]
Exhibit 138 – SAGSHP System [80]

140
‘Nextgen’ control systems leveraging advanced sensors and artificial intelligence
Research currently underway in Ontario is expected to lead to more advanced sensor technology and
integrated control platforms for optimizing grower operations.
In 2018, the Ministry of Agriculture and AgriFood announced “a federal investment of up to $5 million to
the Automation Cluster under the Canadian Agricultural Partnership. The Cluster will be led by
[Ontario’s] Vineland Research and Innovation Centre Inc.” and will focus on areas including “developing
smart, wireless irrigation technologies for potted flowers and vegetables; and developing state-of-the-
art sensors that will help detect and monitor moisture levels in the soil and air.” [81]
At GreenTech 2018 in Amsterdam a new robotic scouting system was unveiled that “uses sensor
technology, machine learning, and artificial intelligence to detect diseases, insect pests, deficiencies, and
other plant abnormalities early on, allowing for a quick response before they become a serious problem.
In addition to recognition of crop stress as the robot passes through the greenhouse, sensors also
measure humidity, ambient temperature, CO2, plant temperature, and photosynthetic ambient
radiation.” [82]
Hybrid generation & storage
Ontario growers are already very familiar with the advantages tri-generation systems offer (as discussed
elsewhere in this study). Advances in battery system technology, combined with other renewable
generation technology (e.g., solar photovoltaic), mean there will be more beneficial opportunities for
growers to explore in the coming years. System planners will also have a keen interest in how the
combination of generation and storage can be used to defer system upgrades and enhance regional
reliability.
For example, the Arizona Public Service (APS) recently commissioned a battery energy storage system
(BESS) as a solution to defer the need for a new distribution feeder due to load growth that was
outstripping existing grid capabilities in a community outside Phoenix. APS considered several
alternatives, including a traditional line upgrade and diesel gensets. The 2MW, 8 MWh BESS provided
the least-cost option and is expected to provide the needed capacity for the community over the next 5
to 10 years [83].
Exhibit 139 – BESS commissioned by Arizona Public Service [83]

141
Microgrids and asset networking
Growers in Essex County have already started installing behind the meter generation and there are plans
for this to continue to enable expansion plans and the adoption of grow lighting in the region given the
shortage of grid supplied electricity in the short-term. In this region, and in others if similar grid
constraints are encountered in the future, there is a unique opportunity to explore microgrid
opportunities, nested microgrids (interconnection of multiple microgrids on a single network) and peer-
to-peer networking across generation assets.
Progress assessing a solution like this is already underway in other part of North America, including
Texas, California, North Carolina, and Illinois. In Texas, Oncor, S&C Electric and Schneider Electric built a
four-part microgrid on the backbone of an energy storage system:
“The grid-tied system consists of four interconnected microgrids and nine different
distributed generation resources: two solar PV arrays, a microturbine, two energy
storage units, and four generators. The system has a total peak capacity of 900
kilowatts but could theoretically scale to meet just about any need.” [84]
Another example is the Penetanguishene MiDAS Microgrid project. In June 2016, Alectra Utilities and
Korea Electric Power Corporation commissioned a microgrid that features a 750 kVA Power Conversion
System, 500 kWh battery and autonomous microgrid controller [85].
Exhibit 140 – Alectra Utilities’ Microgrid Solution [85]

The University of Windsor’s Environmental Energy Institute has two projects focused on energy use in
greenhouses. The Greenhouse Solar Energy System to Reduce Carbon and Grid Dependency is
researching the optimal solar energy system for Ontario greenhouses to reduce GHG emissions, grid
reliance, energy costs and capital investment. This project is being funded by the Greenhouse
Renewable Energy Technologies R&D Initiative [86]. The University is also working on the Greener
Greenhouses project which seeks to reduce GHG emissions from greenhouses by using a solar thermal,
photovoltaic and geo-seasonal thermal storage technologies [87].

142
Next Steps: Demand
Side Management
Priorities

143
11 Next Steps: Demand Side Management Priorities
This section presents a discussion about where energy supply planners, growers and covered agriculture
stakeholders should be focusing their attention in the short term so that research and funding efforts
can be applied judiciously to have the largest impact on supporting grid reliability through demand side
management.

11.1 LED Grow Lighting

The predominant lighting technology in the horticulture sector continues to be high-intensity discharge
(HID) lighting, with double-ended high-pressure sodium (DE-HPS) grow lights being used in a typical
covered agriculture facility. Although there is a lot of discussion in the covered agriculture sector about
light-emitting diode (LED) grow lights, it is not yet widely accepted as a viable replacement option for
several reasons all related to maturity risk:
• Savings claims being made by lighting suppliers have been at odds with published research
[48] [49].
• The cost of agricultural LED products still varies widely and is expected to come down in
the coming years as the technology continues to mature. This means technology
improvement in the near future will likely outperform any LED technology installed today
at a lower cost [48].
• There is a learning curve required for growers to switch from DE-HPS to LED, creating a
barrier that growers tend not be willing to accept given the relative immaturity of the
technology [50].
In Ontario, adoption in the vegetable and flower sub-sectors continues to be minimal [50], while some
growers in the cannabis sub-sector have shown a greater willingness to test and adopt the new
technology [50]. Until very recently no clear horticulture lighting standards existed for manufacturers;
growers are skeptical of performance of LED with claims ranging from 20-60% energy savings [48] [49]
[50] and costs in the range of a four to five fold increase compared to DE-HPS fixtures [88].
LED in the Near Future
In response to the increasing interest in LED lighting in plant growth applications, The American Society
of Agricultural and Biological Engineers (ASABE) has developed new horticulture lighting standards. In
the coming years these lighting standards should pave the way to build trust between growers and
lighting manufactures and suppliers regarding performance information as LED technology continues to
mature.
The following section, excerpted from ASABE documents, describes the context that drove the
development of new lighting standards for the horticulture sector [89]:
“Currently, device energy performance metrics commonly utilize the human eye
response to visible radiation (light); common practice is to measure or calculate
luminous efficacy (lumen per watt). This is not applicable to plant growth in the
horticultural industry, in which the radiant flux or photon flux is a more
significant value than lumen output to accurately predict plant response.
Furthermore, studies have demonstrated that different plant species respond to

144
 radiation wavelength distributions differently. Thus, the device performance
characteristics may need to be defined for varied horticultural applications. Such
characteristics include but are not limited to the spectral content, intensity, flux
density, and uniformity.”
Two ASABE standards, in a three-part series of horticulture lighting standards, have already been
released. The published ASABE standards are15:
• ANSI/ASABE Standard S640 titled "Quantities and Units of Electromagnetic Radiation for
Plants (Photosynthetic Organisms)" – This standard establishes units of measure to
describe horticulture lighting.
• ANSI/ASABE S642 titled “Recommended Methods for Measurement and Testing of LED
Products for Plant Growth and Development” – This standard provides guidance to LED
manufacturers on the recommended testing methods for publishing performance
specifications.
• The third and final ASABE standard in the series is expected to cover performance criteria
requirements for horticulture lighting.
The DesignLights Consortium (DLC) has also recently developed a new performance standard for LED
products used in horticulture applications. Besides specifying technical requirements for various light
output characteristics, such as Photosynthetic Photon Flux (PPF), testing and reporting of lamp efficacy,
represented by Photosynthetic Photon Efficacy (PPE), is also mandated by the standard. Manufacturers
will be eligible to list qualified products on DLC’s new Horticultural Qualified Products List (QPL) [90].16
LED Measure Sensitivity Analysis
The heat map below shows TRC based on avoided electricity consumption costs17. As shown, for an LED
measure to be TRC positive for a consumption-based program, unit costs need to be in the range of
$0.25-$1.00/installed LED watt for retrofit scenarios ranging from 80-25% of baseline wattage (20-75%
savings).

15
Available here from ASABE technical library: https://elibrary.asabe.org/default.asp
16
Further details on DLC’s technical requirements for their new standard is available at:
https://www.designlights.org/horticultural-lighting/technical-requirements/
17
Avoided capacity costs are ignored to simplify the analysis because greenhouse lighting doesn’t have a
significant impact on the provincial summer peak

145
 Exhibit 141 – TRC Heat Map: Avoided Electricity Consumption
$/installed LED watt
% Baseline watt $ 0.25 $ 0.50 $ 0.75 $ 1.00 $ 1.25 $ 1.50 $ 1.75 $ 2.00 $ 2.25 $ 2.50 $ 2.75 $ 3.00
80% 1.10 0.55 0.37 0.28 0.22 0.18 0.16 0.14 0.12 0.11 0.10 0.09
75% 1.38 0.69 0.46 0.34 0.28 0.23 0.20 0.17 0.15 0.14 0.13 0.11
70% 1.65 0.83 0.55 0.41 0.33 0.28 0.24 0.21 0.18 0.17 0.15 0.14
65% 1.93 0.96 0.64 0.48 0.39 0.32 0.28 0.24 0.21 0.19 0.18 0.16
60% 2.20 1.10 0.73 0.55 0.44 0.37 0.31 0.28 0.24 0.22 0.20 0.18
55% 2.48 1.24 0.83 0.62 0.50 0.41 0.35 0.31 0.28 0.25 0.23 0.21
50% 2.75 1.38 0.92 0.69 0.55 0.46 0.39 0.34 0.31 0.28 0.25 0.23
45% 3.03 1.51 1.01 0.76 0.61 0.50 0.43 0.38 0.34 0.30 0.28 0.25
40% 3.30 1.65 1.10 0.83 0.66 0.55 0.47 0.41 0.37 0.33 0.30 0.28
35% 3.58 1.79 1.19 0.89 0.72 0.60 0.51 0.45 0.40 0.36 0.33 0.30
30% 3.85 1.93 1.28 0.96 0.77 0.64 0.55 0.48 0.43 0.39 0.35 0.32
25% 4.13 2.06 1.38 1.03 0.83 0.69 0.59 0.52 0.46 0.41 0.38 0.34

The next heat map examines what local avoided capacity cost (net present value in dollars per watt)
would be required to achieve a TRC of 1; avoided consumption costs are included in the analysis:
• Grey cells show unit cost and baseline wattage ranges where TRC is positive without the addition
of local avoided capacity costs.
• Light blue cells show unit cost and baseline wattage ranges where local avoided capacity cost
ranges between $0 - 1.20/W. For reference, the net present value of provincial system avoided
capacity costs is $1.20/W.
• Dark blue cells show unit cost and baseline wattage ranges where local avoided capacity cost
ranges between $1.20-2.40/W.
Exhibit 142 – Local Avoided Capacity Cost Heat Map: Net Present Value $/W

To put this further into perspective, the heat map below shows simple payback (without program
incentives) across the same range of cost and performance data

146
 Exhibit 143 – Simple Payback Heat Map
$/installed LED watt
% Baseline watt $ 0.25 $ 0.50 $ 0.75 $ 1.00 $ 1.25 $ 1.50 $ 1.75 $ 2.00 $ 2.25 $ 2.50 $ 2.75 $ 3.00
80% 2.10 4.19 6.29 8.39 10.49 12.58 14.68 16.78 18.88 20.97 23.07 25.17
75% 1.68 3.36 5.03 6.71 8.39 10.07 11.75 13.42 15.10 16.78 18.46 20.13
70% 1.40 2.80 4.19 5.59 6.99 8.39 9.79 11.19 12.58 13.98 15.38 16.78
65% 1.20 2.40 3.60 4.79 5.99 7.19 8.39 9.59 10.79 11.98 13.18 14.38
60% 1.05 2.10 3.15 4.19 5.24 6.29 7.34 8.39 9.44 10.49 11.54 12.58
55% 0.93 1.86 2.80 3.73 4.66 5.59 6.53 7.46 8.39 9.32 10.25 11.19
50% 0.84 1.68 2.52 3.36 4.19 5.03 5.87 6.71 7.55 8.39 9.23 10.07
45% 0.76 1.53 2.29 3.05 3.81 4.58 5.34 6.10 6.86 7.63 8.39 9.15
40% 0.70 1.40 2.10 2.80 3.50 4.19 4.89 5.59 6.29 6.99 7.69 8.39
35% 0.65 1.29 1.94 2.58 3.23 3.87 4.52 5.16 5.81 6.45 7.10 7.74
30% 0.60 1.20 1.80 2.40 3.00 3.60 4.19 4.79 5.39 5.99 6.59 7.19
25% 0.56 1.12 1.68 2.24 2.80 3.36 3.92 4.47 5.03 5.59 6.15 6.71

In the absence of program incentives, growers typically want to see a payback of 2 years or less for a
measure like LED lighting due to its relatively unproven status [50]. As shown, for an LED measure to
have a payback under 2 years, unit costs need to be in the range of $0.25-$0.75/installed LED watt for
retrofit scenarios ranging from 75-25% of baseline wattage (25-75% savings). To date, LED costs in
horticulture lighting applications in Ontario have all been higher than $0.75/installed LED watt [48].
LED Advantages & Potential Impact to the Sector
LED lighting offers two important advantages that have the potential to have a major impact on the
sector as the technology matures and as growers begin to trust manufacturer and lighting supplier
information [91]:
1) LEDs are a point light source with directional output, where HPS lamps emit light in a 360-
degree sphere. In other words, LEDs mean more light can be transferred to the plant canopy.
2) LED manufacturers can tune the light output to specific parts of the lighting spectrum, enabling
greater transfer of photons within the optimum spectrum to the plant canopy.
To illustrate the magnitude of the savings potential that will be possible in the future once LED becomes
more widely accepted as a legitimate replacement option, two TRC positive18 savings scenarios have
been modelled relative to the reference case:
a) “LED Grow Lights A” -- 55% savings at a cost point of $1.25/installed LED watt (a mid-range cost
value) [48]
b) “LED Grow Lights B” -- 35% savings at a cost point of $0.75/installed LED watt (the lowest cost
point reported in Ontario to date) [48]
Exhibit 144 shows the energy savings potential for the two variations on the LED measure.

18
From a demand savings perspective.

147
 Exhibit 144 – Hypothetical Consumption Savings Potential for 2 LED Scenarios

600,000
Annual Electricity Savings Potential (MWh/yr.)

500,000
LED Grow Lights A
LED Grow Lights B
400,000

300,000

200,000

100,000

-
2019 2020 2021 2022 2023 2024

Exhibit 145 – Hypothetical Greenhouse Peak Demand Savings Potential by Region for 2 LED Scenarios

160

140

120
Peak Hour Savings (MW)

100

80

60

40

20

-
2024 2024 2024 2024 2024
Chatham-Kent County Essex County Haldimand-Norfolk Niagara County Rest of Ontario
County

LED Grow Lights A LED Grow Lights B

As shown, LED lighting could have an impact between 230 GWh/year and 550 GWh/year by 2024. In
Essex, for example, LED lighting could have a greenhouse peak hour impact in the range of about 60 to
150 MW by 2024.

148
 11.2 Lighting Load Demand Response
“Demand response is a dispatchable solution involving loads that can be reduced or avoided during
hours when the need occurs.” [88] Because grow lighting is a significant contributor to greenhouse peak
hour in regions with high concentrations of greenhouses (e.g. Essex, Niagara), demand response
targeting lighting schedules could have a notable impact on peak reductions. In practice, this load could
be shed by:
• Turning-off lighting (or reducing lighting levels) when the local grid is projected to peak
• Staggering light cycles [92]
• Potentially leveraging other technologies that could achieve the same impact (e.g., storage,
behind the meter generation)
Per the Windsor-Essex Integrated Regional Resource Plan (IRRP) Report, “the magnitude of the desired
peak reduction will determine the duration and frequency of the need. The relationship between these
variables is inherently probabilistic since the load profile varies daily and seasonally. As an example,
[Exhibit 146 below] visualizes the duration and frequency requirement for a desired peak reduction of
15 MW in 2021 using a heat map which shows the probability that a need may arise in a given time of
year and hour of day.”
Exhibit 146 – Heat Map of Need for 15 MW Reduction
MW Range % Probability of Demand Reduction Needed at the given MW Range or Greater Key Statistics
14-15 0% 3% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% Forecast Year 2021
12-14 2% 3% 1% 0% 0% 0% 0% 0% 0% 0% 0% 1% Peak Reduction Targeted 15MW
11-12 5% 6% 2% 0% 0% 0% 0% 0% 0% 0% 0% 2% Total Hours Requiring Demand Reduction per Year 95
9-11 7% 12% 2% 0% 0% 0% 0% 0% 0% 0% 0% 2%
8-9 9% 14% 2% 0% 0% 0% 0% 0% 0% 0% 0% 4%
6-8 15% 22% 3% 0% 0% 0% 0% 0% 0% 0% 0% 5%
5-6 21% 26% 4% 0% 0% 0% 0% 0% 0% 0% 0% 8%
3-5 23% 32% 4% 0% 0% 0% 0% 0% 0% 0% 0% 9%
2-3 28% 36% 6% 0% 0% 0% 0% 0% 0% 0% 0% 14%
0-2 35% 40% 8% 0% 0% 0% 0% 0% 0% 0% 0% 17%
Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

MW Range % Probability of Demand Reduction Needed at the given MW Range or Greater

14-15 0% 0% 0% 0% 0% 0% 0% 1% 3% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
12-14 0% 0% 0% 0% 0% 0% 0% 2% 3% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
11-12 0% 0% 0% 0% 0% 0% 0% 5% 6% 2% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
9-11 0% 0% 0% 0% 0% 0% 0% 8% 7% 4% 3% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
8-9 0% 0% 0% 0% 0% 0% 0% 9% 12% 4% 4% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
6-8 0% 0% 0% 0% 0% 0% 0% 14% 19% 7% 4% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
5-6 0% 0% 0% 0% 0% 0% 0% 16% 23% 12% 8% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
3-5 0% 0% 0% 0% 0% 0% 0% 19% 25% 14% 8% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
2-3 0% 0% 0% 0% 0% 0% 1% 21% 33% 17% 11% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
0-2 0% 0% 0% 0% 0% 0% 2% 26% 35% 19% 13% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Hour Ending 1AM 2AM 3AM 4AM 5AM 6AM 7AM 8AM 9AM 10AM 11AM 12PM 1PM 2PM 3PM 4PM 5PM 6PM 7PM 8PM 9PM 10PM 11PM 12AM

For consistency with the analysis explored by the IESO as part of the Essex Region IRRP process [88],
three different measure scenarios have been modelled to explore the range of potential load reduction
impacts:
• Scenario 1: 30% demand reduction for 4 hours(5am-9am)
• Scenario 2: 60% demand reduction for 2 hours(6am-8am)
• Scenario 3: 85% demand reduction for 3 hours (5am-8am)
Exhibit 147 shows the hypothetical greenhouse peak hour impact in 2024 by region for each of the three
scenarios.

149
 Exhibit 147 – Demand Response Potential in 2024 by Region for the 3 Load Reduction Scenarios

120
Peak Hour Demand Reduction (MW)

100

80

60

40

20

-
2024 2024 2024 2024
Chatham-Kent County Essex County Haldimand-Norfolk Niagara County
County
Lighting Demand Response Scen 1 Lighting Demand Response Scen 2
Lighting Demand Response Scen 3

One of the key market barriers identified during the Essex Region IRRP process was the uncertainty
about whether growers would be able to meet the frequency and duration of curtailment that would be
required if a demand response program was being relied on as a dependable non-wires solution. For
example, it is not clear [88]:
• What the maximum acceptable duration of lighting curtailment will be for growers, and
what growers will consider an acceptable frequency during a growing season;
• What associated costs of taking demand response actions are for growers, including what
type of impacts they have on crop productivity; and
• Whether there are variations between crop types that would impact the answers to any of
the above uncertainties.
The good news is that demand response in the greenhouse sector has been around for a long time; in
the 1980’s well known methods for demand response were implemented in the covered agriculture
sector by Ontario Hydro and other North American utilities [93]. Today in Colorado, Xcel Energy’s Peak
Partner Awards program is open to any customer that is “able to shed 25 kW or more on call (called
events) in the summer months (June through September) during peak hours (between 2 pm and 6 pm):
“The customer commits to the level of capacity they are willing to reduce (which is
decided on a monthly basis) for which they are awarded $2/kW per month for that
commitment. If an event is called, the customer is also eligible for an additional credit of
$0.70/kWh throughout the duration of the event” [94] [92].
Demand response aggregators may also be a helpful ally. In the U.S., aggregators use cloud-based
platforms that connect greenhouse energy assets, such as lighting and climate control, to a

150
management control system. A typical covered agriculture customer in Colorado earns money each year
for helping to balance the grid, typically be reducing their lighting for less than one hour a week [92].
There is also an opportunity to leverage existing research and tool development and deploy or test it
here in Ontario:
• As published in a 2015 research paper, a European company has developed a software tool
specifically designed to dynamically control supplemental lighting in greenhouses. “The software
uses weather forecasts and electricity prices together with a photosynthesis model to compute
energy and cost-efficient supplemental light plans, which fulfills the productivity goal defined by
the grower.” Research findings show that although not all plants are able to cope with irregular
light environments across all growth phases, some plants can without noticeable effects. The
researchers “were able to reallocate between 7.8% and 10.6% of the light hours used for
supplemental lighting,” decreasing peak energy demand and energy costs “without noticeable
effect on the plant quality” [95].
• Similar research by the University of Waterloo presents a control approach based on novel
optimization models to “optimize temperature, humidity, CO2 concentration, and lighting levels”
to “minimize total energy costs and demand charges” [96].

11.3 Energy Supply Planning Focus: Regions with High Greenhouse

Concentrations
One of the indicators for additional electricity growth in the greenhouse sector is the availability and
ease of access to gas and water infrastructure. Planners have already been paying close attention to the
Essex region and there are already significant infrastructure improvements planned to address
forecasted growth constraints being driven by the growing greenhouse sector.
Over the next six years, electricity supply planning will focus more closely on other regions with high
greenhouse concentrations. For example, if the OEB approves the Chatham-Kent Rural Pipeline
expansion, the Chatham-Kent region could see an increase in electricity connection requests – similar to
those being submitted in the Essex region after the after the Kingsville Transmission Reinforcement
Project was approved. Already there are electricity constraints in the Chatham-Kent area, with a new
55MW cannabis facility that is able to connect 30MW in 2020, but must wait until 2023 to connect the
rest of the facility. Niagara and Haldimand–Norfolk regions are also strong candidates for additional
growth and constraints in future years.

11.4 Deeper Research in the Cannabis Sub-sector

CEATI International is launching a study in Q4 2019 to profile the indoor and greenhouse cannabis sector
in more detail. The objectives of the study are twofold: to assess and document baseline consumption of
electricity and natural gas, and to document best practices, available technologies, and implementation
costs for saving energy. The outcome of this work will enhance the Ontario cannabis sector research
presented in this study and will enable comparison of Ontario’s sector to sectors in other North American
jurisdictions. Results are expected early 2020.

11.5 Energy Efficiency as a Resource: Targeted Call for Pilot Programs

“Through its Grid Innovation Fund, the IESO is issuing a call for novel projects focused on reducing
electricity demand from indoor agriculture during local and bulk system peak periods. The IESO will

151
accept proposals from November 18, 2019 – February 14, 2020 and award up to $2.5 million for
approved projects. Special consideration will be made for projects located in areas with identified or
anticipated electricity infrastructure challenges related to indoor agriculture expansion.”
“This target call aims to:

• Accelerate the adoption of cost-effective demand-side solutions by greenhouse growers,

• Demonstrate the efficacy of demand-side options to address local transmission and distribution
infrastructure capacity need(s), and
• Explore unknowns in the operationalization of demand-side options and the impact on
greenhouse productivity” [97]

Energy supply planners, growers and covered agriculture stakeholders can reference findings from this
study to hone their focus and set priorities for the pilot programs. Areas for opportunity include:
• The DSM measures with the greatest potential for consumption and demand savings (see Sections
2, 3.4, 4.4, 6.4 and 7.4),
• LED and demand response opportunities (see subsections above), and
• Innovative and emerging technologies (see Section 10).

152
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 Appendix A Project Overview
Study Team and Advisory Committee
The study team is comprised of individuals from Posterity Group Consulting Inc. (“Posterity Group”) and
Wood Environment & Infrastructure Solutions (“Wood”).
The IESO was the main client for this study. Enbridge and Ontario Greenhouse Vegetable Growers
(OGVG) also contributed financial resources to the study.
The study was also supported by an Advisory Committee whose role was to provide input and guidance
to the study ensuring study findings are comprehensive and broadly applicable. The group includes
representatives from the IESO, electric local distribution companies, Enbridge, commodity group
associations (OGVG, Flowers Canada, and the Cannabis Council of Canada), the Ontario Federation of
Agriculture (OFA) and the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA).

Data Collection Activities and Information Sources

The study team collected data and information from a variety of sources to develop the base year,
reference case assumptions, concepts for the scenarios, and measures to include in the energy savings
potential analysis.
The main data collection activities, information sources and research included:
1. Focus group sessions with growers
Two focus group sessions were conducted: one with flower growers and one with vegetable growers.
We were unable to conduct a focus group session with cannabis growers as no growers volunteered to
participate, due to privacy concerns and a lack of availability due to priorities associated with the newly
developing cannabis market in Ontario.
The following topics were discussed in the flower and vegetable sessions:
• Future growth and expansion: plans and barriers
• On-site power generation opportunities and demand response measures
• Uptake of energy efficiency measures
• General trends and issues in the industry
2. Survey of Growers
A survey was distributed to the growers that participated in the focus group sessions. The survey
focused on detailed site consumption data and energy efficiency measures growers currently use and
are considering for the future. Responses were received from a total of 13 growers (10 vegetable
growers and 3 flower growers).
3. Facility walk-throughs
The study team visited two greenhouses – one growing flowers and the other growing vegetables – to
obtain the following data:
• Energy load center details (number of pieces and types of energy using equipment)
• Estimated energy consumption by end use between the site energy load centers

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 4. Interviews with market actors
The study team interviewed select market actors, including energy managers and organizations that
manufacture greenhouses and/or supply equipment to greenhouse operations. Topics discussed
included:
• Current state of the greenhouse sector and energy use
• Differences between newly constructed greenhouses and expanded facilities
• Expectations for the future
• Market interest in energy efficiency measures and local generation
5. Data requests to utilities and local distribution companies
The study team requested hourly consumption data for greenhouse customers from Enbridge and local
distribution companies. The following anonymized data was provided:
• Hydro One: hourly electricity consumption data for 326 greenhouse customers for 2016 and 2017,
and annual consumption data for an additional 311 greenhouse customers
• Enbridge Gas (legacy Union): hourly gas consumption data for 125 greenhouse customers for 2017
6. Provincial Data on the Greenhouse Sector
Provincial-level data on the greenhouse and cannabis sectors was obtained from OMAFRA and Statistics
Canada, specifically:
• OMAFRA: regional and county profiles: agriculture, food, and business. Provincial-level
information about biomass used for heating in greenhouses.
• Statistics Canada: greenhouse products and mushrooms (Table 32-10-0420-01)
7. Research of secondary resources
The study team conducted extensive research on existing literature of energy use and production of
greenhouses and the indoor cannabis sub-sector. Please see the Bibliography for sources used to
develop this study.

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 Appendix B Model Structure
Energy and water use, and GHG emissions were estimated using Posterity Group’s Navigator Energy and
Emissions Simulation Suite. The model was created to reflect the unique needs of this project, as
described below. This information is here to provide context for the information provided throughout
the study report.

Model Parameters
The model is structured on five parameters. Exhibit 148 defines each parameter for this study and what
metric is used to express the parameter.
Exhibit 148 – Model Parameters
Expressed
Parameter Definition
As

# of
Accounts Number of facilities
facilities

Units Total square footage of facilities sq. ft.

Size Size of a facility (Units/Accounts) sq. ft.

Primarily used for cannabis facilities, this parameter indicates

Area Built Out and the amount of square footage in an existing facility that is fully
%
Operating (%) operational, as opposed to square footage that is currently not
being used for production

Lit Portion The portion of units that have supplemental lighting %

The percentage of the energy end-use that is supplied by each

Fuel Share %
fuel

Unit Energy 𝑒𝑀𝑊ℎ

The amount of energy used by each end-use per unit
Consumption (UEC) 𝑠𝑞. 𝑓𝑡.

Data is added to the model based on this structure to calculate energy consumption, as well as hourly
energy demand.

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Model Segments
For this study, energy consumption and demand are segmented in the following ways:
Exhibit 149 – Model Segments

Regions Sub-Sectors End Uses Fuels

•Niagara •Vegetables & Fruits •Lighting •Natural gas

•Essex (lit/unlit) •Space Heating •Grid electricity
•Chatham-Kent •Flowers & Potted •Air Conditioning •Onsite electricity
Plants (lit/unlit) •Irrigation and generation
•Haldimand-
Haldimand–Norfolk •Cannabis - Circulation Pumps •Oil
Greenhouse •Other (ventilation, •Biomass
•Rest of Ontario
(lit/unlit) CO2 injection, •Cogeneration heat
•Cannabis - Indoor drying, etc.) •Water
•Vertical Farming

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 Appendix C Sector Scenarios
Scenarios were modelled to illustrate potential futures of the covered agriculture sector. Adjustments
are made to model parameters to show deviations from the reference case. The concepts for these
scenarios are based on input from key stakeholders and the assumptions are based on the study’s
research sources.
Two scenarios were developed for this study to show potential deviations from the reference case: a
high growth scenario and a low growth scenario. A brief description of each scenario is provided below.

High Growth Scenario

The high growth scenario models what the sector would look like if there is significant growth in the
greenhouse industry across all regions of the province. Factors that could cause/contribute to high
growth in the sector include:
• High commodity prices (e.g., under supply of cannabis)
• Low (or consistent long-term) energy prices relative to current prices and other jurisdictions
• Adequate supply of natural gas and electricity
• Favourable trade conditions with the U.S. and Mexico
High Growth Scenario Modelling
The high growth scenario was modelled using the following assumptions:
• Number of accounts grows by 2% per year (1% was used in the reference case) in the
vegetable and flowers sub-sectors.
• Number of greenhouse cannabis accounts are doubled compared to the reference case
• Size of vegetable facilities grows by 8% per year (4% was used in the reference case) for all
regions, except:
o Growth in the Essex region for the vegetable and greenhouse cannabis sub-sectors
follows the reference case due to the known energy supply constraints in the Essex
region.
• Size of flower greenhouses grows by 3% per year in all regions.
• Growth in Chatham for indoor cannabis follows the reference case, which reflects a new
large facility coming online in 2020.
• Sub-sectors that do not grow in the reference case (indoor cannabis, and vertical farms) do
not grow in the high growth scenario.
• All other model parameters follow the reference case.

Low Growth Scenario

The low growth scenario models what the sector would look like if growth aligns with the reference case
in 2019 and 2020 (assume investment decisions made in the base year and 2019 will be carried out), but

167
flatlines afterwards as growth-perverse economic conditions persist. The following factors could cause
or contribute to this:
• Reduced investment by vegetable & fruit, and/or flower & potted plant growers in Ontario
because of:
o High energy costs relative to other jurisdictions, including in the U.S.
o Low commodity prices
o Inability of greenhouse operators to secure enough electricity/natural gas to meet
growth requirements
o Unfavourable or uncertain terms of trade with the U.S. and Mexico
Low Growth Scenario Modelling
The low growth scenario was modelled by following the account growth assumptions used in the
reference case until 2020 and having no growth until 2024. Specifically:
• Number of accounts grow by 1% per year in 2019 and 2020, per the reference case, and
then remain constant until 2024. This assumption applies to all the sub-sectors and regions
except for the Flowers sub-sector, which does not experience any growth in the number of
accounts in 2019 and 2020 in the reference case.
• The growth in size of facilities follows the reference case assumptions.

Scenario Results
Exhibit 150 shows the annual consumption under the high growth and low growth scenarios relative to
the reference case. As the low growth scenario follows the reference case growth until 2020,
consumption only declines for the last four years of the forecast period. Annual energy consumption in
this exhibit is composed of grid electricity, natural gas, biomass, and oil (onsite electricity generation,
cogeneration heat, and water are excluded).

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 Exhibit 150 – Scenario Comparison of Annual Energy Consumption (eMWh/yr.)

18,000,000

16,000,000

14,000,000
Annual Energy Consumption (eMWh/yr.)

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

-
2018 2019 2020 2021 2022 2023 2024

Reference Case High Growth Scenario Low Growth Scenario

Exhibit 151 illustrates how the footprint of the sector changes in each scenario relative to the reference
case. The total square footage is displayed and includes all regions and sub-sectors.

169
 Exhibit 151 – Scenario Comparison of Total Units (sq. ft)

300,000,000

250,000,000

200,000,000
Total Square Footage

150,000,000

100,000,000

50,000,000

-
2018 2019 2020 2021 2022 2023 2024
Reference Case High Growth Scenario Low Growth Scenario

170