The telecom infrastructure segment has witnessed significant growth over the past decade with the increasing deployment of telecom towers to meet the growing connectivity needs. According to a recent analysis by Customized Energy Solution (CES), the number of telecom towers in India increased from 490,000 in 2016 to 613,000 in 2018. This number is projected to further increase to 797,000 by 2022. Further, to cater to the consumer’s need to “always stay connected”, it is important to ensure that these towers are in operation 24×7. This requires a constant supply of energy. According to the Telecom Regulatory Authority of India’s (TRAI) consultation paper, “Approach Towards Sustainable Telecommunications”, released in January 2017, energy costs account for as much as 25 per cent of an operator’s network operation expenditure. In addition, a typical communications company spends about 1 per cent of its revenues on energy.
The energy demand of telecom towers is met through grids, renewable sources of energy, or backup energy storage solutions. Given the erratic power supply situation in various pockets of the country, backup energy storage solutions have gained traction in recent years. While traditionally, towercos depended on diesel generators (DGs) for backup, they are now rapidly turning to more environment friendly and cost-effective battery technology for this purpose. The telecom industry has deployed a range of energy storage solutions such as lithium-ion batteries (Li-ion), valve regulated lead acid (VRLA) batteries, lead acid batteries, flow batteries, thermal energy storage solutions and protection circuit module batteries.
The use of Li-ion batteries has helped tower companies minimise their dependence on DGs to an extent where they are required only as an emergency backup when there is no power for a very long duration.
Key energy storage solutions
According to a recent report by TEC, energy constitutes nearly 30 per cent of the opex of telecom companies in urban areas and nearly 50 per cent in rural areas. At present, there are over 600,000 mobile towers in India and the average power requirement of a tower is 1-3 kW. As per TEC, diesel consumption of ten 15-20 kVA capacity DG sets, which can run for 8-16 hours per day, is around 4 litres per hour. However, the operation of these DG sets entails several challenges such as increase in carbon emissions, difficulty in transportation to remote stations, possibility of diesel theft and the high cost of diesel, which is expected to increase further in the future.
The deployment of battery solutions for power storage is primarily aimed at reducing the dependence on
DGs. Different types of batteries have emerged over the years. Initially, VRLA batteries were used to provide backup power to base transceiver stations (BTSs). However, VRLA batteries have several limitations such as quick discharge, slow charging, shorter lifespan, air-conditioning requirements and cell pilferage issues. Typically, their life in terms of duty cycles is 600-800 cycles. Unfortunately, in India, grid power availability or outages do not have a standard pattern. So, there are strong chances that when there is a sudden outage, the battery is not fully charged. This impacts its life, which in turn adds to the cost burden of infrastructure providers. As a result of these drawbacks, more efficient battery technologies have come to the fore. These are Li-ion batteries, which charge faster, discharge slowly, require less space and provide high round-trip efficiencies.
In fact, as per popular industry opinion, the new-age Li-ion battery solutions have the potential to completely replace DGs over the next few years. At present, the use of Li-ion batteries has helped tower companies minimise their dependence on DGs to an extent where they are required only as an emergency backup when there is no power for a very long duration. Further, while DGs require high maintenance and are not at all environmental friendly, Li-ion batteries require low maintenance and are more environment friendly than the DGs. Thus, using Li-ion batteries translates into higher cost savings and greater compliance with the carbon emission norms.
Therefore, it is not surprising that telecom players are gradually moving to Li-ion batteries for their energy storage needs. According to a report by Research and Markets, the India Li-ion battery market is expected to grow at a compound annual growth rate of 29.26 per cent during 2018-23. In the telecom sector, the demand for batteries is likely to increase significantly in the coming years driven by the government’s focus on reducing the carbon footprint, the increasing rate of tower density in urban areas and telecom operators’ plans to increase telecom tower penetration in semi-urban and rural areas.
Earlier, the high cost of Li-ion batteries was considered a major detriment to their adoption. This is gradually changing and the cost of Li-ion batteries is expected to fall from $209 per kWh in 2017 to $137 per kWh in 2022 as per CES estimates.
Key challenges and the way forward
While deploying an energy storage solution, it is important to take into account the energy storage needs of each tower site. A host of factors determine the energy storage requirement of a site including the number of BTSs installed on the tower, load requirement, configuration, grid power availability, and the weather conditions in the area.
Further, the new technology has to be compatible with the existing tower infrastructure. It is not necessary that one single technology will be the best fit for all tower sites and at all times. Thus, companies need to adopt the hybridisation approach to cater to the energy storage needs of towers in the most effective and efficient manner. Companies should not remain fixated on capex as a determining factor while analysing the benefits of hybridisation, and instead look at the opex savings of a particular solution.
