Powering telecom towers forms one of the most important parts of the entire operation and management of a towerco’s telecom infrastructure. While most of the electricity demand for telecom towers is met through grid power, it is not the only energy source. Given that grid supply can be unreliable, companies more often than not depend on energy storage solutions. As per a recent market report, energy storage solutions contribute up to 5 GWh towards power consumption and are expected to account for up to 25 GWh by 2022. Moreover, as per a recent report by TEC, from a cost perspective, energy constitutes nearly 30 per cent of the opex of telecom companies in urban areas and nearly 50 per cent in rural areas.

To this end, energy storage solutions form a very important component of the larger telecom tower power systems market. As such, industry players are making increased efforts towards the exploration of innovative energy storage solutions that can help them save costs and manage their power needs more efficiently.

A look at some of the key trends dominating the energy storage space, industry uptake of these solutions, market growth potential, the key challenges and the future outlook…

Key trends

Uptake in Li-ion battery usage

Owing to various challenges associated with the use of diesel generators and valve-regulated lead-acid (VRLA) batteries, the industry has started using lithium-ion (Li-ion) batteries to meet their power needs. Li-ion batteries charge faster, discharge slowly, require less space and provide high round-trip efficiencies. The use of Li-ion batteries has enabled tower companies to reduce their dependence on diesel generators (DGs) to an extent that these sets are used as an emergency back-up, only when there is no power for a long time. In fact, some industry analysts believe that the new-age Li-ion battery solutions have the potential to completely replace DGs over the next few years. While DGs require high maintenance and are not at all environment friendly, Li-ion batteries require very low maintenance and do not emit any harmful gases. Thus, using Li-ion batteries leads to higher cost savings and ensures greater compliance with carbon emission norms. Since Li-ion batteries come with higher performance parameters such as depth of discharge and efficiency, there has been an uptake in their deployment. In fact, Li-ion batteries are fast emerging as the go-to solution for towercos to meet their energy storage needs.

Remote monitoring of energy storage solutions

Another key trend dominating the energy storage space is remote monitoring of these solutions. 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, operators can even control the cost of these solutions.

Industry uptake

Energy storage has become one of the key focus areas for telcos and towercos. The industry is deploying energy storage solutions such as batteries, which are crucial for ensuring uninterrupted connectivity in places where grid power is unreliable. Apart from being an alternative back up source to diesel, battery-based power is almost half the cost of diesel genset-based power. Earlier, VRLA batteries were used to provide back-up power to base transceiver stations. However, VRLA batteries suffer from limitations such as quick discharge, slow charging, shorter lifespan and the need for air conditioning for maintenance. Over the past few years, new energy efficient technologies such as Li-ion batteries, with higher performance parameters such as depth of discharge and efficiency have emerged.

While operators have already started using Li-ion battery technologies to save on space and have better life cycles, infra companies with site sharing business models are still brainstorming on return on investment. Nonetheless, the demand for energy storage solutions among telecom industry players is only on the rise. Further, the energy storage industry is seeing a high demand for integrated energy storage solutions from telcos and towercos at sites that require high load, but face frequent power cuts.

Projected market growth

According to a report by India Energy Storage Alliance (IESA), the stationary energy storage market in the country is expected to grow at a compound annual growth rate of about 8 per cent during 2020-27. For the forecast period, the top growing renewable markets for energy storage systems will be integrated into the grid, diesel optimisation, solar rooftop and distribution utility-scale storage.

In terms of the share of battery technologies in the total market, the IESA expects the contribution of lead-acid batteries to reduce over the projected period, with flooded lead-acid battery share going from 52 per cent to 19 per cent and forVRLA batteries reducing from 44 per cent to 31 per cent. At the same time, the penetration of Li-ion batteries is projected to increase rapidly from 4 per cent in 2019 to 45 per cent in 2027, primarily due to decreasing prices of Li-ion battery systems. The share of other battery technologies, although still small, could also increase from less than 1 per cent in 2019 to 5 per cent in 2027.

In terms of India’s market position in the global context, according to the International Energy Agency (IEA), India has the potential to become a world leader in battery storage. As per IEA predictions, the country could add 140-200 GW of battery capacity by 2040, the largest by any country and more than 100 times as much as the amount installed in the US today.

Challenges in the way

While the energy storage market in India is projected to record impressive growth in the coming years, key challenges in the way need to be ironed out, in order to realise these growth numbers. One of the key challenges highlighted by industry experts is the lack of important raw material reserves and processed functional materials such as LIB components including lithium, cobalt, nickel and copper in India. Due to the lack of raw material, manufacturing of energy storage solutions in India faces key roadblocks. In addition to the lack of raw materials, India currently faces shortage of state-of-the-art manufacturing facilities and the desired capability for the production of key energy storage solutions. Industry experts have pointed out that due to the uncertainty in battery technologies and the absence of long-term government policies for manufacturing, the investment risks in this sector are currently very high.

Over and above the aforementioned manufacturing challenges, the absence of coordination among key stakeholders such as material suppliers, battery manufacturers, vehicle manufacturers, local and central governments and research institutes is a key barrier to streamlining efforts.

In terms of the deployment challenges, the cost is the main factor. Though operators are shifting from traditional VRLA batteries to new technology batteries, their large-scale adoption is not happening because of the very high costs involved in their deployment. Moreover, both mobile network operators and infrastructure providers are not ready to invest. As per industry sources, as of May 2020, approximately 1,888.55 MWh of energy storage-backed renewable energy projects had been tendered in the country. Of this, 27.2 MWh of tenders got cancelled in their early stages due to high costs. Another challenge to the adoption of battery storage solutions is that at a lot of times, these solutions are not able to fully meet the energy requirements. There are drawbacks such as limited solar scalability, which negatively affects their favourability for large-scale deployment.

The way forward

Going forward, in order to fully capitalise on the growth opportunity present in the energy storage segment, it is imperative to address all the above challenges in a collaborative manner.

According to the Technology Information, Forecasting and Assessment Council (TIFAC), much more research would be required in battery management systems, battery technologies and other storage systems in India over the next four to five years to achieve the set targets. As per TIFAC, dedicated research efforts in the area of battery thermal management could improve battery performance, life cycle and safety, improved modules and pack designs.

In addition, industry experts are of the view that the entire ecosystem, in terms of the way energy is being managed, needs a high degree of automation. To this end, the deployment of online meter reading, which can help in improving the efficiency and functionality of battery solutions, can be explored.