GreenBiz | August 30, 2012
More than 15 years ago, Casey Houweling ventured from his native Canada to start raising his tomatoes in the Southern California sunshine. From Romas to grape tomatoes and tomatoes on the vine, Houweling’s Tomatoes grows a wide range of GMO-free varieties at its outpost in Camarillo, Calif. in addition to its original facility in British Columbia, Canada.
It’s a massive operation. Each year, rows and rows of plants inside the company’s glass-enclosed greenhouses produce over 108 million pounds. Growing the tomatoes hydroponically — without the use of soil — enables Houweling to use less water, yield more on less land and save money. He has also outfitted his greenhouses with solar panels, reuses water and recycles or composts the majority of the company’s waste.
Over the last three years, Houweling has aimed to boost productivity even more — and reduce his environmental impact further — by making a major investment.
He recently unveiled the fruits of that investment: a new 125-acre greenhouse powered by two high-efficient, two-stage turbocharged gas-powered GE Jenbacher J624 engines. The combined heat and power (CHP) system can produce 8.7 megawatts of electrical power — enough to run about 8,800 homes — and goes beyond capturing and reusing heat, as traditional cogeneration systems do.
It also captures CO2 which can then be pumped in to the greenhouse as a fertilizer, as well as water that can be used in facility operations.
As the first commercial CHP greenhouse in the U.S., it’s arguably poised to become the most efficient in the country, and is expected to increase tomato production by 20 percent.
The system makes use of excess low grade heat and water released during production which would normally be wasted, according to GE spokesperson Scott Nolen. And since all of its power output won’t be needed 24 hours a day, Houweling plans to sell the excess power back to the grid.
“From a common sense perspective it seemed like a no-brainer,” Houweling said, reflecting back to his mindset when he first took on the project financed by lease and equity from company profits.
Yet by the time the greenhouse is ready for use, he’ll have spent a total of $17 million — with no idea what his financial return will be.
Certain risk, uncertain reward
As a self-proclaimed risk-taker, Houweling thinks so.
“If we waited for certainty for every decision we make in our facility, we wouldn’t be where we are today,” he said.
“We take a lot more risk than other companies and this has been the biggest risk,” he added, acknowledging that Houweling’s size (with $150 million in annual revenue) lowers the level of risk in comparison to its smaller counterparts.
Houweling said he experienced a defining moment in 2008 after expanding on the final 40 acres needed to build the last in a series of greenhouses at his Camarillo facility.
“I looked at it and said ‘I want it to be completely energy neutral,’” he said. For once, he realized, he wanted to build something that didn’t create any pollution.
How it works
The system’s heat output is stored in up to one million gallons of water that are then available to warm the greenhouses on demand. On top of that, the nitrogen oxide (NOx) produced by the system’s exhaust gas is converted into CO2 and water.
The CO2 is then vented into the greenhouse as fertilizer, while the water — estimated to be about 9,500 gallons a day — will be used in the greenhouse.
According to David Bell, a spokesperson for Houweling’s Tomatoes, most of the NOx — a known air pollutant — is eliminated during the NOx conversion to water and CO2.
“Although a portion of the CO2 will be absorbed by the tomatoes, it is not expected that the tomatoes would absorb the air toxics from the cogeneration units,” Bell said.
In contrast to the 5 parts per million by volume (ppmv) emitted by the new CHP system, greenhouses at Houweling’s Tomatoes that are heated by boilers are permitted to emit up to 40 ppmv NOx, he said.
Improvements aside, Houweling said getting the system online has presented many challenges, namely because he is the first to operate a U.S. facility using the Jenbacher J624. The other Jenbacher J624 engines operated as part of a CHP system are installed in greenhouses across the world.
Houweling reports spending $10 million in equipment and $7 million in infrastructure costs. That includes getting the facility ready for permitting and establishing interconnecting power between the greenhouse to the grid managed by Southern California Edison, the regional electric utility.
The biggest challenge was getting the green light to sell power back to the grid.
While the application to interconnect power and the facility permits have been approved, Houweling said the system has been delayed from going online due to the lack of a full-capacity power purchase agreement from California’s grid operator, the California Independent System Operator.
Though the facility is equipped to generate 8.7 MW — with an additional 4.4 MW in capacity anticipated to come online in the future — it’s currently allowed to sell just 2 MW.
In Houweling’s opinion, the hurdles stem from “the way the American electrical power distribution is set up — having a big centralized power generating station and distributing power to where the demand is,” he said. “What we’re doing is producing the power where the demand is.
“There’s hundreds of documents you have to sign and read through — just to sell your electricity to the grid,” he said. “You can’t estimate the time or cost it takes to build it.”
What delays could cost
As a result, Houweling expects he won’t be able to take the system online until Jan. 1, 2013 — four months later than he initially planned.
And he still isn’t even completely sure he’ll be able to fire up the facility in early 2013. “We could be sitting idle for another year after this –- costing us $15,000 a day,” he said.
Houweling says if he knew three years ago what he knows now, he’s not sure if he would do it again.
Still, interested parties did make the trek out West to see the Jenbacher J624 in action. “There were people from the East Coast here mostly from utilities, someone from Alaska that was interested in doing something, and other industry people,” he said.
But based on what Houweling’s Tomatoes, GE and California government agencies learned from the experience, Houweling said, companies interested in investing in the equipment and getting it online in the U.S. will have others to draw upon for advice.
If not for all the logistical and bureaucratic hurdles, Houweling is convinced many more growers in the U.S. would be adopting the system.
But the path to getting a CHP system up and running might be less bumpy in the future, thanks to a directive issued just this morning from the White House. The Executive Order aims to increase the amount of CHP-generated industrial power in the U.S. by 40 GW by the end of 2020. Assistance will take the form of technical guidance, financial incentives and assistance to states.
California is perhaps one of the best-positioned to receive that help. The state is working towards a goal of boosting the amount of power produced by CHP facilities by 6500 MW — also by 2020.
And while it’s definitely “uncharted territory” in Canada, Houweling says — GE operates one Jenbacher J624 in Ontario and it’s primarily a standby facility — since the government manages and owns the electrical distribution, he expects fewer hurdles to overcome than in the U.S.
Companies interested in installing the technology should “be prepared at how difficult this is going to be,” Houweling said. “Go into it knowing you can’t set the timeline and you don’t know the cost.”
Houweling acknowledges that these two factors make it difficult to finance such a project.
In addition to GE, Houweling recommends Western Energy Systems, GE’s distributor and installer for the cogeneration technology that works alongside its Jenbacher J264 engines, as a resource throughout the process.
“I would use them on lean on them and be much more diligent to be very sure that you have all questions answered,” he said. “Give a lot of time,” he added.
Companies should allow 15-18 months to go through the process before the equipment arrives on site, Houweling said.
While Houweling’s Tomatoes is the only company in the U.S. that is using the Jenbacher J624 as part of a commercial operation, GE’s Nolen is optimistic.
“This is an early gate launch of the project,” he said. “ We’re really hopeful. Market research people want to see it work in the U.S. first, as they’re risk averse.”
In the meantime, Nolen says that GE is working on an even more efficient engine as a followup to the Jenbacher J624, which at 46 percent efficiency runs as the highest in its class. “We’re pushing to get to 50 percent,” he said. “But this doesn’t happen overnight.”
Photo of Casey Houweling in company greenhouse courtesy of Houweling’s Tomatoes
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