The surge in the adoption of data services has led to a rise in new tower roll-outs as well as the addition of new base transceiver stations (BTSs) at the existing tower sites. This, in turn, is driving energy requirements. The industry, meanwhile, is finally moving beyond its dependence on diesel generators (DGs) as the only substitute to poor-grid and off-grid sites. The use of energy efficient equipment, hybrid solutions, renewable technologies and energy storage solutions is helping companies bring down energy consumption and related costs. Industry experts share their views on the emerging trends in the energy management space.
What are the current trends in power consumption in the telecom infrastructure space? What are the key energy-related issues and challenges faced by service providers?
The telecom industry is undergoing a paradigm shift from a voice-centric market to a data-centric one. Further, telecom companies are undertaking investments in building robust 4G and 5G networks. Similarly, the telecom infrastructure industry has witnessed many significant changes in the past few years as the focus has shifted from growth to operational prudence. The key trends in power consumption and requirement in the telecom infrastructure space are:
- In a bid to optimise their energy costs, tower companies are shifting to energy-efficient technologies and alternative sources of energy. Renewable energy technologies such as solar and wind are being used as long-term power solutions for telecom towers.
- As India’s grid power supply condition improves, telecom tower companies are significantly decreasing their dependence on diesel.
- In addition, the industry is increasingly using automation and real-time monitoring solutions, as well as green and energy-efficient solutions.
- Batteries and storage solutions have become an important part of a tower company’s energy management strategies.
Consumers are getting addicted to connectivity and speed. There is a relentless demand for more of each. The ongoing expansion of the mobile ecosystem and the pursuit of technology upgrade to 5G, coupled with a demand for high-bandwidth applications and services such as video and gaming, are keeping the pressure on the industry to increase the availability and quality of broadband connectivity.
What does this mean for power infrastructure? While a subscriber may be far more forgiving for a dropped call for voice, when it comes to data, the consequences of a dropped call can be huge. While network infrastructure equipment continues to have a smaller power footprint, the total spread of such infrastructure will grow multifold to enable coverage and capacity.
The government has been taking steps to contain the power deficit through rigorous improvements in infrastructure. But there is so much more to be done to ensure the availability of grid power for telecom infrastructure, which is abysmally low at an average of eight hours in rural areas and 12 hours in suburban India. This is further compounded by the variability in the energy consumption pattern by telecom towers. The requirement varies depending on the number of subscribers served, air conditioning requirements, efficiency of power instruments, site location, climatic conditions and indoor or outdoor nature of the site. Added to this is the indiscriminate load shedding across the country, particularly in rural/semi-urban areas. Today, telecom tower companies are facing multiple challenges, as discussed below:
- High operating expenditure: Energy costs account for 30-34 per cent of the total operational expenditure for a telecom tower company. Grid power typically is available at Rs 6-Rs 8 per unit, whereas the cost of power through diesel gensets (DGs) is around Rs 12-Rs 14 per unit. This is rising further with diesel costs increasing sharply.
- Diesel pilferage losses: Diesel pilferage losses of around 20 per cent have been observed in the industry, which further increase energy costs. In extreme cases, the overall cost of generation has skyrocketed to Rs 22-Rs 26 per unit.
- Increased carbon emissions: It is estimated that telecom towers alone consume around 2 billion litres of diesel per year. Diesel consumption by telecom towers accounts for around 5 million tonnes of carbon dioxide per year, which is 2 per cent of the total greenhouse gas emissions in the country.
In the recent past, two significant developments have altered the telecom scenario in India. The first is the entry of a new telecom operator, which has emerged as a market challenger, and the second is the rise in 3G/4G data usage. The telecom tower sites’ energy demand is witnessing a major transition. Due to competition and cost pressures among telecom operators, energy cost optimisation has become important for the industry. At present, most of the BTS deployment is outdoors.
Rural wireless teledensity is growing rapidly and has now reached over 50 per cent. With leading operators’ increasing their focus on rural areas, the challenge of grid power in remote rural locations assumes significance from an energy perspective. At non-grid sites, diesel generators, along with suitable higher capacity battery backup, are the optimal solutions for tower companies.
The industry is hopeful of improved grid power availability with the Ministry of Power’s aggressive focus on power generation and transmission.
What are the energy management practices followed by the industry? How have these helped in optimising energy costs?
In a bid to efficiently utilise their energy costs, tower companies are moving towards energy-efficient technologies and alternative sources of energy. The sector has already deployed over 90,000 diesel-free mobile sites to reduce their energy costs and carbon footprint. In addition, the industry is progressively using automation and real-time monitoring solutions, as well as green and energy-efficient solutions. Batteries and storage solutions have also become an important part of a tower company’s energy management strategy.
One of the major environment-friendly initiatives implemented by Indus Towers is the usage of solar cooling units (SCUs) and simple power panels at its sites. An SCU is a smart and innovative solution that runs independent of power from a grid, battery or diesel, and is charged with solar energy. It also uses natural air as its coolant, with zero cost of cooling. Through this, the company has been able to save 25-30 per cent energy consumption. Another accomplishment in reducing power consumption for Indus has been replacing air-conditioning units with free cooling units, natural cooling units and SCUs to maximise the conversion of indoor sites to outdoor sites as a part of its “Shut AC” initiative.
On the consumption side, indoor to outdoor transformation of sites has been undertaken, which has eliminated the need for running air-conditioning units.
Hybridisation of the energy equipment has played an important role as well. Judicious and well-engineered site design with the combined use of grid, DG, solar and battery power has resulted in a significant reduction in power and fuel costs. At locations where the grid is available for 16 hours or more, tower companies have been able to achieve DG-free status, converting them into green sites.
Remote management is another critical component of the overall energy management strategy adopted by some tower companies with limited deployment as they either choose to manage themselves or assign contracts to energy service companies or large operations and maintenance players. No doubt, such initiatives take time to spread, and require upfront capex spends.
While the industry is facing the challenge of higher capex requirement for energy optimisation, tower companies and telecom operators have continued to focus on minimising the usage of air-conditioners, and swapping indoor BTSs with outdoor BTSs. The reduction in diesel usage and increasing number of diesel-free sites has also helped in carbon emission reduction. These practices have certainly helped to an extent.
What has been the experience of tower companies in adopting renewable energy solutions? What are the most promising green energy solutions?
Indus Towers, with its focus on sustainable telecom, maintains over 62,000 “Green Sites”. It operates more than 86,200 sites as outdoor sites, which account for 70 per cent of its portfolio, by eliminating the usage of air conditioners. The Green Sites do not consume any diesel; instead, they use innovative solutions like free cooling units and fast charging battery banks to reduce energy consumption. Through this, the company has been driving its efforts to reduce its carbon footprint across the country. As a part of its efforts, Indus Towers has been able to significantly reduce diesel consumption since its inception, despite the growth in the networks. Further, through its “Shut AC” initiative, the company has achieved a significant reduction in carbon emissions.
The most prominent adoption of renewable energy solutions is that of solar photovoltaic (PV) systems. For making a site green, it is important that it is DG-free. To do so, right-sizing the energy components based on the likely grid availability and load requirements is key. For sites that must operate under grid deficiency of 12 hours or more every day, lithium-ion energy storage technology offers great potential for diesel usage reduction. The primary benefit of the technology is that it can be charged quickly and has a deep discharge capability with far less sensitivity to degradation in performance through increased temperatures compared with the valve-regulated lead-acid (VRLA) battery.
Well-engineered coupling of energy infrastructure for off-grid sites that have solar, DG and lithium-ion batteries has the potential to produce remarkable results in terms of opex savings. At grid-connected sites, with deficient power supply, a combination of DG, solar (when feasible) and lithium, combined with advanced VRLA can be used.
Over the years, tower companies have carried out feasibility or pilot deployments of renewable energy solutions such as biodiesel, biomass gasifier, wind and solar. Among these, solar PV is technically better than the others. However, solar deployment at tower sites is challenging and less economically viable as compared to deployment at solar farms.
It is a known fact that the total cost of ownership (TCO) of renewable energy solutions on towers is still high. In my view, a uniform carbon policy encompassing all sectors is much needed to achieve large-scale carbon emission reductions and create a win-win scenario among all stakeholders.
What is the current adoption level of energy storage systems at telecom sites? What is your outlook for this segment?
Indus has been a leader in promoting green alternatives to fossil fuel. In the absence of grid power, Indus’ sites first run on stored energy (batteries) till they are fully utilised. In the absence of grid power and energy storage, Indus is forced to switch on the diesel generators installed at sites. The Shut DG green sites project was conceived to run telecom network operations without using diesel as power backup and instead run the network on a more environment-friendly advanced battery bank solution, without compromising on network uptime.
At its telecom sites, Indus Towers uses high-energy efficiency solutions to achieve maximum power output and has been deploying VRLA batteries at its sites. Indus explored every possible variation of VRLA type storage solutions to select the most efficient one for deployment at sites. Gradually, the company moved to a more efficient storage technology like VRLA+, or the next generation of VRLA batteries.
The arrival of lithium-ion batteries has been nothing short of a blessing. These batteries are more energy-dense compared to both lead acid and nickel metal hydride. They are extremely versatile and have been powering from airplanes to pocket devices (for example, cell phones) for a long time. They hardly require any maintenance. At present, we can think of using lithium-ion as an alternative to traditional lead acid batteries, although the cost is on the higher side. In the near future, the unit cost will go down due to economies of scale.
VRLA has so far been at the centrestage of energy storage technologies at telecom sites, not necessarily because of its performance characteristics but more for its price and residual cost benefits. As scale picks up in India and global prices of lithium-ion batteries drop further, it will be feasible to undertake an en masse shift to lithium-ion technology.
Traditionally, tower sites were set up with VRLA batteries. Due to moderate initial costs, it was a preferred choice in the industry, despite its performance limitations in terms of life cycle and depth of discharge. Lithium-ion technology has been around for a while but had not generated traction primarily due to very high initial costs. However, of late, lithium-ion batteries have been deployed in a sizeable quantity, especially on ground-based masts.
Lithium-ion batteries have emerged as a potential alternative to VRLA batteries. They have a relatively better TCO (total cost of ownership) due to higher discharge cycles, better depth of discharge, higher turnaround charge efficiency and faster charging capability. In the coming years, lithium-ion batteries are expected to grow significantly.
What will be the key emerging trends, business models and practices for energy management and optimisation in the telecom space going forward?
To mitigate the use of diesel in powering telecom networks, the industry has been taking suo-motu initiatives such as diesel-free sites, energy efficient storage solutions, conversion of indoor sites to outdoor sites, and deployment of renewable energy solutions wherever feasible. As the country’s largest telecom infrastructure company, Indus Towers is aiming to become diesel-free in the next four to six years, even as it will invest Rs 3.5 billion this year for solutions and technology to reduce carbon emissions.
Fuelled by the exploding data usage and the roll-out of next-generation 4G/ voice over long term evolution networks, the tower industry will continue its growth journey in the coming years. Sharing of network infrastructure is the key going forward, as rapidly increasing data requirements need to be catered to. Tower companies will be looking beyond traditional business models and capitalise on opportunities in areas such as Wi-Fi hotspots and fiberisation.
Companies will continue to look forward to increased cooperation from the government as the industry will play a pivotal role in the faster roll-out of telecom infrastructure, thereby establishing ubiquitous connectivity.
Given the nature of the telecom business, change is the only constant. New equipment will keep getting added and the power footprint of devices will shrink. Most of rural north and central India experiences high ambient temperatures for an extended period of time. Power demand for cooling shoots up from late morning to early afternoon. This is another big variable. To these variable factors, if we add the changes being made in the grid, mostly ongoing improvement (but an occasional deterioration), as well as change in tenancies at sites resulting in load band changes, then we have quite a few factors impacting the energy infrastructure at telecom sites.
It is imperative that a comprehensive audit of the existing tower infrastructure takes place to determine the current load requirements, equipment health and residual life. A prudent assessment has to be made of the likely requirements in the near- to mid-term future.
A business model, where the managed energy provider’s scope includes the management of energy and the entire infrastructure including metering, heat management, energy storage management and the choice of technologies suitable for inclusion to deliver energy units through renewable energy solutions, is likely to succeed. The managed energy provider will have to work within the telecom tower precincts rather than serve from outside. The entire technology topology of the site infrastructure would have to be managed by the managed energy provider in this mode. This would then build up a solution entity that is formed through joint ventures and multiple technology alliances, all bound into a service-level agreement framework.
The wireless telecom industry is becoming more data-centric with the growth of 4G networks and increased data usage by subscribers. Also, competition among operators is leading to an increased focus on ensuring quality of service. Going forward, network performance through better energy management will carry more importance than energy cost reduction.