Despite being the second-largest telecommunications market in the world, the Indian telecom space continues to struggle due to lack of uninterrupted power supply, inadequacies of the power grid and the risk of unexpected power outages. Currently, the Indian telecom tower fleet stands at over 400,000 with installed power levels ranging from 1 kW to 8.5 kW. However, around two-thirds of these towers experience electrical grid outages for more than eight hours a day because of multiple issues across the power supply value chain. Further, grid-based power infrastructure is inadequate to meet even the prevailing energy demand in the telecom sector, which is over 25 billion kWh per annum.
In this scenario, telecom networks require reliable power backup solutions that can operate for hours or even days when the power grid fails due to severe weather conditions, natural disasters or poor grid quality. These solutions include lead-acid batteries, Lithium-ion batteries and solar-powered batteries. Going forward, the market size of batteries in the telecommunications industry has the potential to grow by $5.69 billion between 2021 and 2025, at a compound annual growth rate (CAGR) of 14.12 per cent.
Types of batteries and energy solutions
Due to frequent interruptions in power supply, the life cycle of batteries gets shortened, which, in turn, increases the operational cost to provide telecom services in rural areas. Therefore, manufacturing companies are coming up with several energy solutions to power telecom towers that are not only inexpensive and durable but also good for the environment. These solutions include:
The majority of batteries used in the telecom industry are lead-acid type. Lead-acid batteries, specially designed for the telecom market, ensure maximum performance according to the load capacity. These batteries meet telecom 19”/23” cabinet space requirements for telecom applications, have deep cycle capability and high cycle life, have a wide operating temperature range as well as high temperature durability. Furthermore, lead-acid batteries can be used as off-grid energy storage systems since they are scalable and compatible.
Additionally, lead-acid batteries are relatively inexpensive compared to lithium-ion batteries. However, they have a lower energy density, which means larger and heavier batteries are required to provide the same power. It is estimated that the world market for lead-acid batteries, valued at $6,008.17 million, will grow at a CAGR of 5.89 per cent by 2027.
Telecom systems need small power sources to back up the supply to mobile phone relay stations, cable TV terminals and other facilities. Lithium-ion batteries, with their technological capabilities and their customisable property, play a crucial role in supporting these demands. They offer a long life cycle and have a good safety record. Further, the number of cells in the battery can be adjusted based on the energy requirement. Reliance Jio was among the first telcos to employ lithium-ion batteries in its telecom grids.
The market for these batteries is currently classified as an assembling market, where lithium-ion cells are imported and lithium-ion batteries are assembled through a combination of software and hardware.
Solar-powered batteries are an economically feasible option in remote locations, which are either off-grid or have high diesel consumption demands to deliver reliable power to telecom infrastructure such as base transceiver station (BTS) equipment, repeater stations, towers, etc. This system can save high electricity bills and can provide a steady source of electricity throughout the day.
Solar energy decreases diesel use considerably in distant locations where the grid is unstable or when there is no grid at all. It eliminates the need for diesel gensets for electricity generation and lowers diesel genset maintenance expenses. Further, it lowers the cost of fuel transportation to the BTS site and contributes to the reduction of greenhouse gas emissions and noise pollution.
Moreover, it broadens firms’ operational range. Deploying on-site solar battery systems also minimises energy-related operating expenses and the difficulties involved with hauling diesel to remote sites on a regular basis.
Telecom towers have traditionally relied on gensets and batteries for their power backup. However, these methods face high operating costs for maintenance, repair and fuel. In this scenario, fuel cells have emerged as a potential alternative solution.
Diesel generators require high operational expenditure due to fuel, maintenance and servicing costs. They also contribute to harmful emissions, thereby affecting air quality. On the contrary, fuel cells can run non-stop till the fuel is available and thus make a good stand-alone renewable energy solution to replace diesel generators. In fact, the telecom industry has been one of the early adopters of fuel cells.
Given the competitiveness of solar power, a fuel cell and solar hybrid could be a perfect solution, one that is reliable, sustainable and a green alternative for the future.
Future adoption trends
Rising energy demand
With the rapid adoption of telecom services, the need for disruption-free calling services has increased significantly. As a result, batteries are expected to be in high demand in the telecom industry. Further, the emergence of 5G services and the resultant increase in traffic will require adequate storage solutions to power telecom networks. Although the 5G new radio standard is more energy efficient per gigabyte than the 4G standards, the planned 5G use cases and new spectrum bands would necessitate a large number of mobile sites, far outweighing any energy efficiencies. According to industry estimates, each 5G site will require two to three times the power of a 4G-equivalent site. Conversely, as more services are delivered at the edge, the number of data centres will need to be expanded; this will necessitate the use of new-age battery solutions.
Telecom operators account for 2-3 per cent of the total global energy consumption, and are among the most energy intensive firms. As operators’ energy usage increases, so does their carbon footprint, harming not only the environment but also their reputation and position, especially amidst the growing class of socially conscientious investors.
In this regard, solar-powered batteries provide a new opportunity for reducing carbon emissions. With the constant need to lower telecom energy costs, the acceptance of green telecom power systems is expected to increase over time. As per the GSMA, the adoption of green technologies has the potential of generating 40 million tonnes annually in carbon savings.
Need for cost-effective solutions
With the proliferation of data centres, the need to build supporting infrastructure has also increased. The cost of building this infrastructure comprises various components such as field operations, facility management, procurement and information technology usage, which makes it even more challenging for companies to spend on energy solutions. In the given scenario, stakeholders require cost-effective battery solutions to enable seamless operations.
Moreover, reducing energy costs requires resources (labour and capital) at a time when operators are concentrating their investments on expanding the capacity and reach of their networks. However, with the arrival of new battery solutions, the energy costs will be reduced to a great extent, allowing operators to channellise their funds into other areas. For instance, lithium-ion battery manufacturers are working on technological advances and are trying to reduce their prices. This development is expected to have a positive impact on the overall market growth.
The way forward
Net, net, telecom is one of the most promising sectors for battery use. While challenges pertaining to sustainability, scalability and inclusivity associated with some battery solutions continue to hamper their adoption, the future adoption scenario remains bright.
In the coming years, the Indian telecom sector is expected to witness exciting technology developments in terms of application of fuel cells. In addition, green telecom power systems are expected to create opportunities for the market. According to GSMA, the transformation to the more energy efficient and greener alternative tower power systems, which include renewable energy hybrid systems and diesel generator-advanced batteries, is expected to save the telecom industry $13 billion-$14 billion annually. However, it will require a joint effort by various stakeholders, including telecom operators, the government and the Telecom Regulatory Authority of India, to bring in efficiency and optimise the sector’s energy costs for facilitating backup power in India.