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Pitch

SUFI provides an integrated hub that sustainably manages the urban energy-water-food nexus in an era of climate change.


Description

Summary


SUFI is an effort to provide an integrated environment - facilities, services and practical knowledge - to more efficiently manage the energy-water nexus from a food perspective. SUFI mitigates the impacts of climate change by minimizing GHG emissions associated with food production, processing and distribution and its demands on energy, water and land, especially as this demand increases along with population, urbanization and changes in consumption patterns.

Energy and water are the most critical inputs to our food systems. According to the UN Food and Agriculture Organization, food systems account for 30% percent of the energy consumption, over 70% of freshwater withdrawals and more than 20% of GHG emissions worldwide (30+% if changes in land use are included). Forecasts indicate that we will need to produce at least 60% more food by 2050 to meet demands of growing populations and evolving economies, centered in urban areas. This is no small task given that freshwater and land available per capita for food production are declining, and that food systems depend largely on fossil fuels for energy. In short, we must find better ways to produce more, nutritious food using less water, and less and cleaner energy.

SUFI aims to meet this growing demand by implementing a series of Hubs – the first in Somerville, MA – that employ less resource intensive methods of food production to achieve food, water and energy security for greater urban resilience. A Hub is an urban farm that uses Controlled Environment Agriculture (CEA) techniques to grow fresh, hyperlocal produce for surrounding communities. In a Hub, we adopt technology and best practices to minimize or eliminate demands for energy, water and land; eliminate waste and wastewater; and potentially revitalize underserved urban areas.

While SUFI is an effort to increase urban environmental resilience, it has many additional benefits that improve a community’s collective economic, environmental and social resilience.


What actions do you propose?

The amount of food produced globally has steadily increased over the past several decades. Unfortunately, this has been accompanied by an increase in energy intensity, water usage and GHG emissions. While the global food system is a significant contributor to climate change, it is also especially vulnerable to its impacts, making the problem especially challenging. We propose to address this challenge with an initiative to deploy integrated urban farms, or Hubs, that use fewer resources and generate fewer impacts than food systems in place today.

SUFI Integrated Hub. The components of a Hub leverage existing, proven technology, tools, practices and know-how related to urban agriculture, hydroponics, energy efficiency (EE), renewable energy (RE), and the circular economy. We combine these elements into an integrated model that delivers environmental, economic and social benefits. Figure 1 depicts a notional model of a Hub incorporating three key elements: CEA, RE/EE and Building Reuse.


The concept of a Hub is largely modular by design as the application of some technologies is determined by site specific conditions, but always comprises three main components:

CEA. We focus on CEA, namely indoor hydroponics, because it offers several advantages over traditional land-based agriculture. For a given food productivity level, hydroponics:

-       Requires 1/8th of the land as denser plantings generate higher yields in shorter cycles.

-       Uses 90% less water (and thus less energy to produce and pump that water).

-       Extends the growing season to year round.

-       Requires no herbicides or pesticides making it eligible for organic certification (in fact, these chemicals can damage hydroponic systems).

-       Is not subject to weather, insects and other pests that can negatively affect productivity levels.

Inside a building, we can go vertical to increase the productivity for a given footprint by: 1) installing a hydroponics system on each floor; or 2) installing multiple growing tiers on a single level.

RE/EE. In an indoor farm system the largest energy load is the grow bed lighting. We seek to reduce this load, and its carbon impacts by 1) employing highly energy-efficient LED grow lights and 2) installing RE system, mostly likely solar PV, to meet 100% or as much of this demand as possible. LEDs also give off less heat, reducing cooling loads during hot weather. Energy efficient pumps, refrigeration, office lights and equipment (e.g. printers) are also standard in a Hub operation.

Building Reuse. By repurposing an existing building asset (e.g. warehouse or manufacturing facility) we are essentially reusing the embodied energy and water of the building materials, and avoiding the carbon emissions associated with new construction, which studies have shown to be generally higher than retrofitting. We have preference for occupying and securing vacant buildings in underserved urban communities, identified through stakeholder engagement as having potential to support socio-economic growth.  

Optional Hub Components. We can include other technologies and methods in a Hub design. Some of these may be more economically viable or technically suitable to specific Hub conditions. As such, we can mix-and-match components to best meet social, environmental and economic objectives as well as the needs of the Hub community. Other optional components that may be considered in Hub design include:

Farming:

-       Aquaculture and aquaponics to produce greens and protein output.

-       Aeroponics to produce greens using over 95% less water than land-based farming.

-       Poultry-keeping to produce protein output.

-       Beekeeping to produce honey and support bee populations.

RE/EE:

-       Small wind turbine to meet electricity demand.

-       Microgrid (RE w/storage) to provide clean, reliable electricity at the lowest cost during outages or low RE-generating periods.

-       Solar thermal to provide primarily water heating, and possibly space heating and cooling.

-       Community Shared Solar (CSS) to meet Hub electricity demand as a participant; as CSS system owner, we can also provide low-carbon electricity to community members.

-       Waste-to-Energy (WTE), or anaerobic digestion, with Combined Heat and Power (CHP) to produce electricity and heat. This could be implemented on site or through an arrangement with an adjacent municipal or industrial wastewater treatment plant.

-       Lighting strategies to shift electricity load to off-peak rate periods.

Water efficiency:

-       Rainwater collection and/or greywater reuse to recharge water required for hydroponic operations.

Building:

-       Green roof to reduce cooling load in summer and provide green space for workers and the community.

-       Rooftop hydroponic greenhouse to reuse existing building assets.

Below we describe the tasks and activities we must undertake to make SUFI a viable business providing environmental, economic and social value to all community and business stakeholders.

Business Planning. While this proposal provides a framework for evaluating and socializing the SUFI concept, a comprehensive business plan is still required to organize SUFI as a business venture. The business plan is an important device when: applying for loans, grants and other funding; recruiting partners, managers and advisers; and establishing a framework for future strategic planning. Our business plan will comprise:

-       Executive Summary: summarizes the main elements of the plan.

-       Business Description: identifies the name and legal structure; describes the history, product and service offerings, target customer, our founding team’s experience and areas of expertise; and most importantly, defines the mission and long-term vision of the business.

-       Market Analysis: describes the fresh food industry size, growth potential, customer requirements and key trends; defines target market, identifies prospective customer by type, size and location. (See Figure 1 for types of prospective customers).

-       Competitive Analysis: lists direct and indirect competitors, and shows SWOT analysis.

-       Go-to-Market Plan: describes marketing and sales strategy, business model, revenue forecasts and community engagement strategy.

-       Organization & Management Plan: describes the organizational structure of the company; defines staff roles and responsibilities; and identifies senior managers and the Advisory Committee.

-       Operations Plan: covers food production processes, food safety and quality assurance plans, and accounting procedures; identifies operational risks and mitigation strategies; and outlines Hub-level operational plan that is tailored to each Hub’s specific operating environment.

-       Finance: estimates startup costs and operating expenses; explains plan to obtain funding through venture capital, loans, leases, grants, crowdfunding and partnerships; and reviews organizational risks and mitigation strategies.

Business planning cannot occur in a vacuum; and thus stakeholder engagement is a crucial activity. To better understand market conditions, customer and community needs, barriers to success, risks and investment climate, we will engage various stakeholders that have an interest in optimizing the nexus of energy, water and food for urban resilience. These stakeholders include public agencies, nonprofits, impact investors, universities, business and NGOs. To name a few examples:

Institute for Sustainable Communities

American Planning Association

Urban Sustainability Directors Network

Bloomberg Philanthropies

Whole Foods and Trader Joe’s

New York City School of Urban Agriculture

Cornell University, Controlled Environment Agriculture

Overseas Private Investment Corporation

Global Impact Investors Network (GIIN)

Hub Development. Our approach to business planning centered on stakeholders with broad view of urban resilience. When it comes to developing and deploying a particular Hub, however, it’s all about the community.

Community Engagement. Our best chances for success depend on community engagement. These interactions are important to delivering Hub services that meet business and community goals. Through this activity we can better understand and identify:

-       Demand-based strategy for crop production (which crops, how much and when to grow).

-       Areas and populations that are underserved by fresh food retailers, or food deserts.

-       Properties that may be suitable for a Hub location.

-       Needs of institutional purchasers (schools, hospitals, public agencies).

-       Nuances of the regulatory environment, and barriers to scaling.

Community stakeholders include public and private, nonprofit and for-profit entities, such as:

Food Policy Councils

Planning Commissions

Redevelopment Authorities

Departments of Neighborhood Development

Boards of Health

Economic Development Organizations

Food hubs and coops

Trade associations

Businesses, schools and hospitals

Nonprofits

Our stakeholder outreach strategy includes: meetings, social media campaigns, project websites, newsletters, workshops, focus groups and participation in public forums (e.g. Boston’s Urban Ag visioning process). We seek to involve, not just inform, our stakeholders and believe that transparency is vital to gaining community trust.

Site selection. We propose the first Hub site in Somerville, MA because its Urban Agriculture Initiative – the first of its kind in New England – supports urban agriculture through policies, codes, education and outreach. MA also offers favorable conditions for developing RE and EE projects. In fact, MA is ranked #1 in the country for EE savings and #4 for solar capacity

Additional Hub site selection criteria include:

-       existing structure with minimum 4,000sf capacity to hold farm, lighting and RE equipment;

-       access to public transportation for workers and customers;

-       feasibility for RE (solar PV, wind, CSS); and

-       proximity to underserved communities.

The city may have more than one Hub if it has multiple suitable sites.

Design and Installation. We will issue RFPs for architects, engineers and consultants to assist with: facility renovation and buildout; farm/lighting design and installation; and RE systems design and installation. These staff must work together as an integrated team as the specifications of one system often have implication for the others. For example, grow lighting load is the major consideration for sizing the RE system. These teams are also responsible for generating detailed carbon and water balances for an integrated Hub.

Scaling the Initiative. When planning to scale the SUFI Hub model, we identify two types of barriers: technical and economic. The only technical barriers to scaling are the physical constraints of a particular Hub. Hub components are modular such that capacity can be expanded incrementally as space and/or funding become available. Access to capital, however, is most often cited as the biggest challenge for urban agriculture, and often RE, projects.

The current pool of available grants, rebates and tax credits may be sufficient to make an individual Hub viable – and we will certainly avail ourselves of those resources – but we need thousands of Hubs worldwide. To ensure the scalability and financial viability of SUFI, we therefore look to business partners and impact investors who we count on for the financial knowledge and resources to help grow the initiative at the magnitude needed to achieve meaningful environmental, economic and social benefits.

To that end, we intend to structure our business as a benefit corporation, and to seek B Corp certification. Doing so makes our business eligible for a rating from the Global Impact Investing Rating System (GIIRS). This enhances our position with impact investors; offers legal protection of our mission when considering financial transaction; gives access to the GIIN community; and boosts credibility with business partners and stakeholders with whom we must work. 

 


Who will take these actions?

We propose to establish a for-profit, social enterprise in the form of a B Corp and/or benefit corporation to execute and safeguard the SUFI mission.

The SUFI enterprise is led by a senior management team and guided by an Advisory Committee. The management team includes a chief executive, an operations lead, and finance and accounting lead. The Advisory Committee consists of individuals with various backgrounds including CEA, retail food, finance and venture capital, economic development, urban agriculture and energy-water-food security.

As discussed above, partnerships are necessary to executing the SUFI mission and scaling its outcomes. As such, we are open to different business relationships that help us successfully scale positive outcomes. These arrangements may include joint ventures, public-private partnerships (P3) or franchise agreements.


What are the key challenges?

Hub features include:

-       Urban hydroponics farm producing hyperlocal food

-       Existing urban structure

-       Water efficient equipment for irrigation and HVAC

-       RE to help meet electricity demand

-       Energy efficient equipment for lighting, refrigeration, pumping, HVAC, office and IT

The Hub reduces, avoids and eliminates GHG emissions by:

-       Reducing reliance on fossil fuel-based grid energy

-       Transporting food shorter distances to customers

-       Using less water and thus less energy to treat and move that water

-       Not using herbicides or pesticides

-       Minimizing electricity loads from farming, lighting and office systems

-       Requiring no new land cleared or construction for agriculture

The Hub offers progress towards carbon neutrality by decoupling Somerville’s food system from fossil fuel use, energy demands and competition for water. Additionally, the more Somerville can meet its own resource needs within its boundaries (i.e.  the less those resources have to cross various borders), the less vulnerable it is to geopolitical dynamics and better able it is to adapt to future climate change impacts. 


What are the key benefits?

In addition to reducing GHG emissions and mitigating the impacts of climate change, SUFI’s integrated Hub model also provides several other environmental, social and economic benefits:

-       Reduces water demand and stress on water systems by using 90% less water than soil-based agriculture; greywater reuse and rainwater collection offer the possibility of even greater reductions.

-       Increases health and well-being by: 1) providing food year round to urban residents, who often have limited access to such food; and 2) providing training and education in sustainable farming, health and nutrition.

-       Promotes socio-economic development by: 1) creating 10-75 new jobs per Hub; 2) generating and retaining revenue within the community; and 3) providing job training for transferable skills.

-       Supports growth of RE/EE sectors.

-       Facilitates urban revitalization by repurposing vacant buildings to host Hubs; benefits include improved quality of life, reduced crime, higher property values, increased tax revenues and lower costs for city services such as police, fire and nuisance/hazard abatement.

Optional Hub components may offer benefits like reduced urban heat effect from green roofs and access to clean, reliable power from CSS systems.


What are the proposal’s costs?

Table 1 summarizes the initial capital and operating costs of implementing the first Hub. We provide ranges as costs very much depend on site-specific parameters (e.g. utility rates) and financial terms (e.g. leases).


The assumptions listed in Table 1 are generally conservative and do not account for economies of scale in larger Hubs. In reality, we anticipate that the project costs for lighting and farm equipment will be financed to some extent through loans or leases, shifting those capital costs to operating expenses resulting in lower startup costs. We also expect that a portion of capital costs, especially in MA, can be offset by:

-       Government, corporate and private grants for small/local producers, economic development, and RE/EE projects (e.g. USDA and Merck Family Fund).

-       Rebates, tax credits and other financial incentives issued by state, local and Federal government to install RE (e.g. SRECs) or to make EE upgrades (e.g. MassSave). In some cases, as much as 75% of project costs may be reimbursed.

B Corp or benefit corporation status may also help lower our cost of capital, making investment more attractive.

 


Time line

We have a target to complete the first Hub in Somerville, MA within 15-20 months.

As the first Hub nears completion, we will start developing next pair of Hubs, and then each pair of Hubs thereafter at a 6-month stagger. All Hubs are expected to take 12-24 months to complete. Our goal is to take the initiative overseas within three years. Our strategic planning process will review project outcomes versus plan and adjust the goals, scope, schedule and funding requirements of new projects accordingly.


Related proposals

Value not set.

References

Food and Agricultural Organization of the United Nations http://www.fao.org

United Nations Water Program http://www.unwater.org/

Notre Dame Global Adaptation Index, ND-GAIN (ND-GAIN) http://index.gain.org/ranking

Patrick Canning, Ainsley Charles, Sonya Huang, Karen R. Polenske, and Arnold Waters, Energy Use in the U.S. Food System, USDA, Economic Research Report Number 94, March 2010

http://www.ers.usda.gov/media/136418/err94_1_.pdf

Institute for Sustainable Communities, Urban Agriculture & Sustainable Food Systems, Sustainable Communities Leadership Academy, Resource Guide, 2013

http://sustainablecommunitiesleadershipacademy.org/resource_files/documents/Food%20SCLA%20RG_WEB.pdf

Mary K. Hendrickson, Mark Porth, Urban Agriculture – Best Practices and Possibilities, Urban Sustainability Directors Network, University of Missouri, June 2012

http://extension.missouri.edu/foodsystems/documents/urbanagreport_072012.pdf

Dominic Waughray, Water Security: The Water-Food-Energy-Climate Nexus, The World Economic Forum Water Initiative, 2011

http://www3.weforum.org/docs/WEF_WI_WaterSecurity_WaterFoodEnergyClimateNexus_2011.pdf