The ever-increasing demand for telecom services has led to a significant increase in energy consumption at telecom sites. As energy accounts for a significant share of telecom companies’ opex, managing energy needs and optimising costs have emerged as key focus areas for industry stakeholders. The need to reduce opex as well as the industry’s carbon footprint has led stakeholders to minimise their diesel consumption by exploring alternative and cost-efficient technologies, and adopting high efficiency storage solutions. Further, renewable energy solutions have gained significant traction. Industry experts talk about the key energy management strategies and emerging trends in this space…
One of the biggest objectives of Indus has been to manage, maintain and reduce the dependence on diesel. We have worked with customers to bring down air conditioning requirements at sites. We have removed air conditioners from more than 100,000 out of 125,000 sites. This is a big transformation as air conditioning contributes significantly to electricity consumption.
We have also worked on creating green sites. We have identified sites that will run purely on EB (grid power) plus battery combination. We have collaborated with suppliers to develop VRLA plus batteries, which are good for outdoor installation. Our portfolio consists of more than 65,000 green sites. It has significantly reduced our dependence on diesel. We are working on making our sites diesel-free by 2020.
Equipment efficiency has gone up in the past 10 years by many times. Earlier, we used power interface units in our system, which have now been replaced with a simple power solution. This has increased the efficiency from 90 per cent to 98 per cent. Over the past 10 years, our diesel-EB ratio has improved. When we started, it was 50:50 that is, 50 per cent of the cost was diesel and 50 per cent was electricity. Now, the ratio stands at 83:17.
Another point is that the consumption pattern is changing. With the influx of data, the concept of network busy hours or peak hours has become irrelevant. This has put a lot of focus on energy optimisation. The consumption has gone up by 14 per cent in terms of kilowatt hours between 2017-18 and 2018-19.
Interestingly, there is no right solution for managing the energy requirements. We should be flexible enough to adapt to the current realities and build a model that meets customer requirements. There are three stakeholders – operators, towercos and RESCOs (renewable energy service companies). They need to work together and think about a dynamic model. Whether it is a capex model or an opex model is a commercial decision. I think it should first be a viable model.
Power availability is not going to be stable for the next four to five years as we do not have full grid availability. The electricity situation in the country is improving considerably both from the infrastructure perspective as well as availability perspective. In the next five years, we should have improved availability provided that the challenges faced by discoms are addressed, particularly their financial condition.
Our experience in renewable energy adoption has been similar to that of our peers in the industry. We have trialled all kind of renewable solutions including fuel cells, biomass, wind and solar. Of these, only solar has been scaled up. However, considering the industry as a whole, even solar would not have scaled beyond 3-4 per cent of the total towers in the country. From this perspective, none of the solutions have scaled up as they should have. The main reason for this is not the technicality of the solutions but their commercial modelling. The two main challenges in the adoption of renewable energy solutions are that these entail a high capex and a long payback period. We are yet to find a solution that is sustainable in the long term. Currently, only 2-3 per cent of ATC’s energy consumption needs are met through renewable energy.
The cost of electricity or grid power has increased. Two years back, it was Rs 7-7.5 per unit across the country while today it stands at Rs 9-9.5 per unit. This can be attributed to variations in grid prices and diesel prices.
We focus on field operations management, which involves people, processes and technology interventions. On the people side, we aim to train people especially on energy.
We have devised a strong process around energy, wherein we are monitoring the electricity board readings and diesel consumption on a daily and monthly basis through software. Based on this, we are able to decide what should be the ideal cost for sites. Over the past two years, the industry has witnessed a reduction in the tenancy ratio.
Many operators have exited tower sites. This has put pressure on sites. We are also trying to optimise the load on diesel generators (DGs) and EB capacities. This is also helping us control consumption. On the one hand, the load on operators is going up with 4G coming in and data consumption increasing multifold. On the other, operators are expecting us to bring down prices. This is very challenging at this point of time. However, we are trying to optimise by all possible means.
The biggest issue that a tower company faces today in terms of energy management relates to the distribution part of the grid. Rural areas face several challenges in terms of grid connectivity and reliability. Another challenge is that other sources of energy such as battery storage solutions, DGs and renewables are not able to fully meet the energy requirements. There are drawbacks like limited solar scalability. I think the whole ecosystem in terms of the way energy is being managed needs to improve and a lot of automation is required. A good thing that has happened is online meter reading, which has helped in improving the efficiency.
OMC power is a RESCO. We build, own, operate and maintain our own solar power plants. In addition to the telecom sector, we provide power to communities using mini-grids. Today, we have 100 independent power plants in 100 villages in Uttar Pradesh, and power about 125 towers. We are now focusing on pure telecom. Now it is beginning to make sense to actually focus on telecom power solutions and services alone. We are bringing in net savings to our customers especially towercos by putting up photovoltaic (PV), reducing DG hours, managing fuel as well as the logistic chain associated with fuel. We recently received a contract for about 1,000 new towers.
The net energy demand is not going to reduce as the number of people using phones and services is only increasing. In fact, with 5G, the energy demand will increase resulting in challenges in terms of unequal distribution of loads. One of the most important things is the issue of pass-through to the customer. In telecom, there has been a cost plus fixed margin model for vendors including towercos. This has to change as we operate in an environment with variable and unpredictable growth in energy demand. There is value for the industry in outsourcing energy management to somebody who knows how to do it and who is willing to do it at their own cost. This is where energy service companies come in.
The models we have adopted are not dynamic enough to adjust to the new realities. The good thing is that now we can use net metering and put the energy generated back into the grid. We also have customers that are very large and have large assets. Their cost of capital may actually be much lower than ours. So, the model that has to be followed, capex or opex, needs to be decided strategically. Further, the benefits of the technology should not be killed.
It is not just the introduction of 4G that is affecting energy consumption. A lot of things have happened simultaneously. One is that there have many mergers and acquisitions. Old equipment has been replaced with new equipment. With the introduction of 4G, the energy requirements have increased. Thus, despite a fewer number of operators, the overall energy requirements have not reduced at a macro level. Further, the overall energy costs have not reduced significantly. So, the challenges remain the same. In fact, it becomes much more challenging for service providers like us to manage energy costs because at certain sites, the energy requirement has increased significantly and while at others, it has reduced. For instance, at a site with a planned power generation of 6 kWh, the energy requirement may have reduced to 4 kW, whereas at a site with 4 kWh of planned generation, the requirement may have increased to 8 kWh. In this case, providing renewable energy such as solar is not feasible because it is not moveable or mobile. These challenges have increased with the introduction of 4G.
Despite the increase in consolidation and decrease in tenancy levels, the total energy consumption in the telecom sector has not reduced significantly. Power availability in general has improved significantly, but still there are a large number of sites, particularly in remote areas, that have low power availability.
Among the alternative sources of power, only solar and lithium ion batteries have been successful in telecommunications. We would prefer using solar wherever grid power is available for less than 16 hours a day on an average and lithium batteries wherever it is available for more than 16 hours.
Coslight India is more than 10 years old in India. We have a very large base with more than 52,000 towers powered by Coslight batteries. On the ground, we have more than 1,200 MW of installations.
Over time, user requirements have changed. They are now looking for smart solutions that take up small space, have fast charging, and can be used outdoors as well as for cyclic application.
There is a big transformation happening in terms of data usage across the industry. While the number of towercos or operators is reducing, consumers are increasing every day. In our country, there are 1 billion mobile users and more than 0.50 billion internet users. We require energy to support this growth.
Over the past four to five years, the entire industry has been moving towards smarter storage solutions, which can be remotely monitored. They have a modular design, thus their number can be increased or decreased. This way we can control the cost. People are shifting from traditional VRLA batteries to these new technology batteries. However, their adoption is not happening because of high cost. Moreover, both mobile network operators and infrastructure providers are not ready to invest.