Vertical farming, the energy crisis has brought the sector to its knees

The negative global financial outlook is also putting pressure on i consumers. Most vertical farms grow herbs, sprouts and other leafy vegetables. Leafy vegetables are the leading products in the sector because they grow rapidly under LEDs, can be kept for a short time and have a high price. But as inflation rises, consumers they may prefer to forgo the expensive herbs grown by these establishmentsinstead opting for cheaper products. This context especially applies for European vertical farms: “The European market is difficult for vertical farming, because it exists a lot of competition by crops grown in fields or in greenhouses”says van Rijswick.

New markets

Vertical farms may have a better chance of surviving looking further out, in countries where energy is cheaper and growing outdoors is difficult. One area that obviously meets these requirements is the Middle East. The Gulf Cooperation Council countries – Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates – import around 85 per cent of all of their food products and 56 percent of their vegetables. “As we choose new markets to expand into and establish an agricultural business, we will look at places that have an increasing need for food production and food security”, declared the founder of Infarm Erez Galonska at the Vertical farming congress in Abu Dhabi last December 14th. Earlier this year in Dubai one of the largest vertical farms in the world was inaugurated. The facility is nearly three times the size of Infarm’s in Bedford and supplies leafy vegetables to Emirates airlines and local retailers.

Outside of the Middle East, vertical farms may struggle to find a market. In 2020, Ben Pieterse founded a vertical farm startup called Glowfarms. He managed to raise 750,000 euros, enough to build a test farm in the Netherlands.

But while Pieterse tried to raise 5 million euros for a commercial-scale pilot farm, the energy crisis has started to make itself felt. Initially the founder of Glowfarms had budgeted €0.07 per kilowatt-hour (kWh) for electricity costs, but as prices continued to rise this forced him to revise his estimates to €0.40 per kWh. After some failed attempts to raise funds, in early November Glowfarms closed his startup: “Conditions are very bad for vertical farms right now”explains.

A different future

While Western consumers may have come across vertical farm-grown produce in high-end restaurants and grocery stores, technology has failed to truly transform agriculture, as the first proponents promised. For a long time the industry presented itself as a more sustainable method of growing vegetables, but all the energy needed to light up the LED bulbs causes the products grown in vertical farms to produce ₂₂carbon dioxide emissions (CO₂) higher compared to those grown in the fields and then transported hundreds of kilometers to their final destination. In a world where all electricity was generated from renewable sources, emissions would be much lower; at the moment, however, the context is quite different. Nonetheless, vertical farms they use much less water and pesticides than fieldsanother reason why water-challenged regions are so interested in this technology.

“I was hoping the impact of vertical farming could be bigger”Pieterse says. The European energy crisis has exposed some of the flaws of vertical farming: “I think more realism will emerge in the coming year”says Van Rijswick. Energy prices in Europe will fall again, but 2022 has shown that an energy-intensive industry is always bound to be vulnerable to fluctuations in electricity prices, unless farms find a way to generate their own energy. This is another reason why Gulf countries, which tend to have more stable electricity prices thanks to huge oil and gas reserves, are starting to attract more interest from producers of vertical farm.

However, the vertical farming experiment in Europe may not be completely over. Both van Rijswick and Pieterse agree that technology could have an impact, though not necessarily at the dinner table. According to van Rijswick, LED-powered farms could be paired with traditional agriculture to make young plants grow faster or to grow a large number of plants to be used for research purposes. A future where vast quantities of vegetables are grown in warehouses under LED lights around the world, however, may not be just around the corner.

This content originally appeared on Wired UK.