Tecogen Opens Up Vast New Market With First Chiller Sales To Agriculture

MadeWell Ventures LLC, which runs an indoor growing facility in Denver, Colorado, purchased two 150-ton TECOCHILL natural gas engine-driven chillers. These are the first chiller sales into the agriculture industry for Tecogen Inc. (TGEN – $3.97).

Although this particular customer will use the chillers in the cannabis production industry, there are thousands of farmers with greenhouses or indoor facilities that grow fruits, vegetables, plants or flowers, that could benefit from a similar installation.

Indoor growing facilities often use 1000-watt, high-intensity U.V. lightbulbs. This necessary lighting equipment generates a lot of unwanted heat, which has to be removed from the indoor environment with air conditioners and ventilation systems. This farmer, however, opted for a much more economical TECOCHILL.

According to the customer’s engineering estimates, the Tecogen chillers and specified ancillary equipment are expected to save the facility over $100,000 per year by significantly reducing the building’s electrical demand and energy usage.

In addition, the units provide free high-quality waste heat from the engines for heating and humidity control, and carbon dioxide (CO2) from the cleaned exhaust stream will be used as fertilizer to improve growing conditions. It’s important to note that plants grow by converting the CO2 that’s found in air to carbon through photosynthesis, and greenhouse plants absorb even more CO2 because of the artificial lighting.

The chillers will also be equipped with Tecogen’s patented Ultera emission control technology. That way, the facility will not only cut its carbon footprint in half (via reductions in energy usage), but also reduce emission of harmful smog-generating criteria pollutants (NOx and CO) to near-zero levels. Without this cutting-edge emissions control technology, the equipment exhaust stream would not be clean enough to recycle as CO2 fertilizer, an important feature only TECOCHILL offers.

Large Potential Use In Agriculture

TECOCHILL natural gas engine-driven chillers provide building owners a reliable, proven, efficient, and cost-effective alternative to conventional electric motor-powered chillers.

A chiller’s benefits are significant. For example, it lowers a building’s cooling costs with 30 to 60 percent, by eliminating most of the electrical demand (kW) associated with providing cooling. In addition, it offers optional “waste” heat that is available whenever the chiller is running. This high-quality heat source (up to 230°F hot water) literally comes for free, and can be used to satisfy a building’s needs for hot water or space heating.

Basically, they make sense wherever large chillers are needed, including hospitals, colleges, schools, office buildings, aquariums, government buildings, large residential facilities, industrial facilities, hotels, and ice rinks.

In the agriculture space, TECOCHILL’s potential uses are unmistakably large. By running on inexpensive and reliable natural gas, the chillers can help agricultural customers avoid punitive peak electrical demand charges. As an added bonus, customers are assured their greenhouses will remain cool and their crops will not experience adverse temperature fluctuations during power outages, because the chillers are fed by reliable natural gas.

Moreover, growing indoors is becoming more popular as it has a host of benefits as opposed to traditional gardening outdoors. For example, an environment can be created that is ideal for the plants. Depending upon the crop, key factors which may be controlled include temperature, levels of light and shade, irrigation, fertilizer application, and atmospheric humidity, etc.

Also, by having an indoor garden, one can eliminate many parasites that are more common outdoors. In addition, farmers are able grow the same product throughout the year, making greenhouses increasingly important in the food supply of certain countries. And plants or flowers can grow indoors where they normally can’t because it may be too cold outside.

Additionally, many garden facilities were either constructed without large capacity electric infrastructure or are housed in converted warehouses without the necessary wiring for a traditional large scale electric solution. A natural gas powered system allows such facilities to avoid costly upgrades of their building’s electrical infrastructure, saving the operator on both installation and ongoing electric bills.

One final advantage is the growing desire of consumers to “eat local”. There is an increasing awareness of the carbon footprint of long distance delivery systems as well as the need for a constant local supply of fresh and organic food. On average, food in North America travels over 1,500 miles before it’s sold in a grocery store and consumed. According to research, food travel accounts for approximately 16% of energy use in the United States.

Consumers realize that importing food from thousands of miles away is a cost heavy, carbon intensive endeavor and public opinion has shifted to the more eco-friendly delivery models such as proximity-to-market.

Energy Inefficient Cannabis Production

Indoor cannabis production is among the most energy-intensive industries in the U.S. In Colorado, for example, where marijuana was legalized in a 2012, a study found that growing operations in 2014 consumed as much energy as 35,000 households.

The reason is simply the technology required to grow the crops. Specific energy uses include high-intensity lighting, dehumidification to remove water vapor and avoid mold formation, space heating or cooling during non-illuminated periods and drying, pre-heating of irrigation water, generation of carbon dioxide by burning fossil fuel, and ventilation and air-conditioning to remove waste heat.

Because in some cases energy bills might represent 30 percent of the total cost of a cannabis operation, growers are all seeking ways to become more energy efficient. Installing chillers is clearly a very smart method to do so.

Conclusion

Cultivated Power was the first systems integrator to specify the Tecogen chillers for a grow facility and will be the first to incorporate CO2 fertilizer capture and utilization. The system will not only provide an ideal growth environment but will also be one of the most efficient operations in the United States.

We expect Tecogen to generate more sales in the agriculture sector, because it’s unsustainable that 16% of North America’s energy bill comes from food transportation. Therefore more food needs to be grown locally.

Cultivated Power also signed a service agreement with Tecogen. Service contracts are a reliable and growing part of the Company’s total sales. In fact, as of year-end 2014, 68% of Tecogen’s installed units had a service contract. Buy recommendation.

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