The telecom industry is committed to developing a green telecommunication ecosystem and has 115,000 diesel-free sites that use energy-efficient solutions like lithium-ion (Li-ion) and advanced VRLA batteries, and free cooling units. The Tower and Infrastructure Providers Association (TAIPA) recently organised a Green Energy Conclave with the theme, “Developing Sustainable Telecom Ecosystem”, where industry stakeholders deliberated on the growing energy needs and infrastructure requirements for emerging technologies such as 5G, internet of things, augmented reality (AR) and virtual reality (VR). Excerpts…
The telecom industry is certainly going to become the most important infrastructure segment in India in the coming years. Since it will carry so much of traffic, no other infrastructure sector will be able to compare with this industry, which already has a footprint of 1.2 billion, and is only going to grow in future. Digital infrastructure is going to grow threefold as we get ready for 5G, which will require a large number of small cells and towers. Optic fibre is going to grow significantly. We are setting up around 500,000 km of fibre under BharatNet. Several infrastructure providers and telecom service providers (TSPs) are also aggressively adding fibre. Even their proposed investment plans are focused on improving the internet infrastructure.
Given the telecom sector’s importance and the three to fourfold expected increase in telcom infrastructure, its sustainability becomes absolutely critical. Unfortunately, the first thing that happens during natural disasters is that power supply to the towers gets cut off. TSPs and infrastructure providers are always ready but the lack of power is a key obstacle. Even otherwise, telecom services have become critical and round-the-clock availability is a key requirement. Moreover, given the rate at which climate is changing, there is no option but to go green.
The industry is already doing a lot by committing to zero environmental harm. The Department of Telecommunications (DoT) and the Ministry of New and Renewable Energy (MNRE) should set up a joint taskforce to ensure that we work on this together. I would also request that the telecom sector become a priority recipient of the incentives offered by the MNRE to promote renewable energy. I am sure that there is scope to design an attractive incentivisation policy within the MNRE’s mandate.
DoT has committed to promoting green telecom in the National Digital Communications Policy (NDCP), 2018. The sector regulator has released several recommendations on green telecom. We have set fairly ambitious targets and we would like to see collaboration among telcos, infrastructure providers, renewable energy service companies (RESCOs) and the other renewable energy providers.
The sector is not fragmented anymore so it will be easy for the RESCOs and others to work with the industry. In many countries, including China, the green telecom initiative is so central to them that they have appointed dedicated directors to oversee the green initiatives. I think our TSPs can also take a leaf out of that.
There was a time when the cost of new energy used to be around $80 per kW. Today, I understand, in leading countries like Germany, it is down to 3-4 cents per kW. This is the direction we are moving in. Thought leaders are predicting that the industry will be powered by the convergence of communications internet, energy internet and mobility internet. Everything will be digital and decentralised. I believe that the possibilities of synergies and convergences are huge. Going forward, strong collaboration at the policy level between DoT and the MNRE, and the incentivisation of the industry will be needed to achieve our mission.
The cost of solar panels has reduced significantly over the past few years and the lowest rate achieved in bulk power plants is Rs 2.44 per unit. The cost as per recent tenders invited by the Delhi state government was Rs 2.85 per unit with a 30 per cent subsidy from the MNRE for rooftop solar projects that can be installed at telecom towers. Even without the subsidy the cost will not be more than Rs 4 per unit.
Since the telecom industry buys power at the same rate as the industrial and commercial sector, which is Rs 8-10 per unit, it can achieve 50 per cent savings on its electricity bill by using solar energy. I suggest the sector should go for solar energy. Further, the cost of battery storage has reduced to half over the past one and a half years from around $300 per kWh to $170 per kWh. We expect this to fall to less than $100 per kWh over the next year or year and a half. Once this happens, it will become the norm across sectors.
Today, the key constraint in solar power adoption is that we have peak power requirement in the evening, whereas solar production happens during the daytime. This highlights the need for energy storage solutions. The telecom sector already has 1,200 MWh of battery storage systems. We can expect the cost to come down in subsequent years. In recent years, lithium titanate batteries, which have a longer lifespan of 25 years, have been introduced. The life span is clearly longer than regular Li-ion batteries (8-10 years) and matches that of solar panels and telecom equipment (typically 20-25 years). Although these batteries are costly at present, their price will come down in the next two to three years. When the lifespan of batteries, panels and equipment becomes the same, the need for battery replacement will reduce.
In terms of recovering investment, even a generation cost of Rs 4 for solar can allow the developers to recover their investment in four years and enjoy free electricity for the next 21 years. That said, setting up solar plants require a huge upfront investment, which may not be readily available with industry players. Also, securing loans for solar is not so easy. Many micro, small and medium enterprises are facing this problem. We are countering this issue by coming up with a payment security mechanism in the form of a fund. We will assure the bank that in the event of a payment delay, it can take 50 per cent of the installment from this fund. Second, multinational organisations such as the World Bank and the Asian Development Bank are coming up with concessional loans for the industrial and commercial sector. The telecom sector can also avail of such loans with a minimum financial burden. Further, the sector can opt for the RESCO model, under which the supplier puts up the system and maintains the plant and the user simply pays for electricity. Even for battery storage, many such options are available.
To give a snapshot of the renewable sector, around a year and half back we had set a target to reach 175 GW by 2022. By February 2019, we had already reached 141 GW. In solar, we have achieved 74 GW (27 installed, 13 under installation, 34 bid out projects) as against a target of 100 GW. We are well on track and the entire country should take pride in this green revolution. The telecom sector has 500,000 towers. Even a 10 kW plant at every tower will contribute almost 5,000 MW, which is not a small number. The industry will also save on diesel usage.
The telecom industry will continue to grow in terms of the number of consumers, data usage per capita and the total amount of data usage. Further, the industry is at the cusp of deploying a completely new breed of technologies, specifically 5G, which is not an incremental jump, but rather a quantum jump from all the previous generation technologies.
The infrastructure requirements of 5G are huge and the current infrastructure will not be adequate. Thus, it is imperative that we make huge investments in fibre, towers and small cells. The number of towers, currently at about 500,000, will probably have to be quadrupled, if not more, in the next couple of years.
The industry is going to become central to every other sector. A couple of trends will emerge going forward. First, there is going to be more unbundling of players. The infrastructure providers are going to have a much more sustained play in the years to come. Their role is going to increase and more players are going to emerge.
If we want a sustainable future, we have to go green. Green solutions will become better and cheaper in the future. The cost of solar cells and battery storage solutions will come down. The industry should not adopt renewable energy reluctantly just because the Telecom Regulatory Authority of India (TRAI) or DoT has prescribed it. The situation is changing now, and players are looking at the use of renewables in a positive light. Even from a regulatory and policy point of view, we have evolved. Back in 2011, our recommendations on green energy to DoT were more prescriptive in nature, stating what should be done, which formula should be used, etc. In October 2017, in our recommendations to DoT, we made our stance less prescriptive and it was more industry led and voluntary.
Another point worth highlighting is that the distribution network continues to languish although power availability has improved. One great thing about renewable energy is that it is completely a distributed, stand-alone solution, which is quite appropriate for the telecom industry. If we can increase the efficiency and productivity of solar cells and address the problem of real estate, renewables can emerge as an ideal solution as they do not depend heavily on the transmission system. I firmly believe that this solution is actually going to work. India receives a large amount of sunlight and we should leverage that to our benefit.
Of course there are issues related to financing, capex, which can be addressed through favourable policies. The way the government has aggressively pursued the issue of solar power availability is commendable. Great work has been done in the renewables sector and I am sure all of us in the telecom space can take advantage of it.
The growth of the telecom sector in India can be attributed to the growth in telecom infrastructure, which is the backbone for telecom services. The Indian telecom market is the second largest globally in terms of the number of subscribers. In terms of telecom infrastructure, the country has around 500,000 towers and 1.9 million base transceiver stations (BTSs). Telecom being critical infrastructure has to be available 24×7, and thus requires continuous power availability. Even the telecom licence mandates telecom service providers to ensure continuity of operations and provide uninterrupted services to consumers. While grid supply today almost matches the power demand, there are several gaps in distribution. Grid supply is not ensured on a round-the-clock basis to telecom installations. This requires backup power such as battery banks and renewable energy systems. Further, owing to the lowest data tariffs across the world, India is witnessing unprecedented data usage. This data boom has increased the popularity of several applications such as AI, ML, surveillance and video gaming. At present, data consumption per active subscriber is 10-12 GB per month. This will further grow with the launch of 5G, which will support several new applications like robotic surgeries, VR and connected cars. In addition, the government is undertaking the Smart Cities programme, which will further drive the power requirement.
Over the past few years, telecom infrastructure providers have played a defining role in the growth and development of the telecom sector. The unique concept of tower sharing has been developed by Indian towercos along with the Ministries of Communications and Urban Development. The telecom infrastructure industry has also responded positively to the sustainability challenges by adopting measures such as BTS site conversion from indoor to outdoor, installation of free cooling units, use of storage battery solutions. Further, the NDCP 2018 envisages the utilisation of renewable energy through incentivisation.