Ensuring energy optimisation and sustainability has always been a key priority for telecom tower companies. In recent years, several initiatives have been taken by towercos to optimise energy consumption at tower sites. At tele.net’s recent conference on “Telecom Infrastructure in India”, Vijay Jain, chief operating officer, TowerVision India; Tushar Kapadia, telecom infrastructure consultant; and Dr Ajit Shankar, managing director and chief executive officer, Ardom Towergen, shared their views on the prevailing energy management trends in the Indian telecom infrastructure space. Key takeaways from the discussion…
What are the emerging trends in the energy management and sustainability space in telecom infrastructure in India?
Vijay Jain
The demand for energy will rapidly rise in the tower and the broader telecom industries as we move from 2G to 5G.
Tushar Kapadia
The telecom infrastructure space has evolved in the past 10 years. With rapidly changing dynamics and rising complexities, the challenges faced by telecom infrastructure companies and their approach to tackling these have changed as well.
Ajit Shankar
With 5G, the number of towers or radiation points will increase with the rise in small cells. One of the challenges in energy management will be the consequent increase in the scatter of sites, as smaller amounts of power will have to be generated and managed at a greater number of points. Simultaneously, with the multiplicity of technologies, there will be high power requirement at certain tower sites. The spectrum of power needs at sites will expand significantly from very low to very high. Further, energy requirement has been fluctuating at a large number of sites due to frequent upgradation, addition and deletion of technology, as well as mergers and acquisitions (M&As) amongst towercos and telcos; and closure of business of several telecom operators due to which certain towers have become redundant. This variation needs to be addressed.
Another emerging trend is the growing importance of manpower management, and employee safety and health initiatives, in the highly manpower-intensive business of energy management in the telecom sector. Appropriate training of employees is required in this space.
There is a high degree of variation at every site and with 5G, there will be fewer pockets requiring local power management at these sites. What are your strategies, as a tower company, to deal with this situation?
Vijay Jain
Most towercos are using operations and maintenance subject matter expert (SME) partners that provide skilled manpower to manage site operations. The manpower is trained to perform health management of infrastructure assets and to automate sites, besides other activities. Besides, ensuring the right kind of dimensioning at sites is critical for a towerco’s energy management. According to the customer equipment direct current (DC) load at sites, the right capacity of infrastructure such as electricity availability (EB), diesel generators (DGs), and DC power systems are to be standardised at sites. Towercos have also devised their own processes to ensure adequate diesel availability at sites to aid during sudden power cuts of unknown duration. The majority of sites depend on DGs and batteries for power backup. The EB bill payment process is also important to avoid disruptions at sites. Other processes include landlord management, DC load management, energy reconciliation, and monitoring of electricity and diesel consumption per hour (CPH) at sites. With widespread digitalisation, towercos are adopting technological initiatives such as remote monitoring solutions for energy management and site uptime parameters at tower operating centres. The towerco industry has seen an increase of about 50 per cent in diesel tariffs, around 30 per cent in EB tariffs and about 50 per cent in DC load consumption in the past five years. However, towercos have optimised energy costs, which has benefitted operators. This was made possible through efforts on site electrification, battery management and reduction in DG run hours. Towercos are investing in renewable solutions, although implementation challenges persist.
There have been aspirations of making sites zero-diesel. Has the industry been able to achieve this or is it still work in progress?
Vijay Jain
As per the towerco industry average, there are 30-40 per cent of sites classified as diesel-free, according to the Department of Telecommunications’ (DoT) guidelines. The number of these sites will improve as the electric grid infrastructure improves.
How successful have green initiatives been in the industry? How can the renewable energy service company (RESCO) model help?
Ajit Shankar
With improvements in the average grid power availability, optimal usage of energy storage solutions has become important for the success of renewable energy. In Punjab and other circles with reasonably good grid power availability, we are in the process of deploying integrated battery management solutions with remote monitoring software, through which we plan to provide energy storage as a service. This will enable customers to get rid of their battery capex. Thankfully, there has been a change in the Indian Accounting Standards recently, whereby users can capitalise this long-term lease without impacting their earnings before interest, taxes, depreciation and amortisation (EBITDA). Further, under income tax laws, the lease fee will be treated as opex, leading to a reduction in tax liability.
As far as deployment of renewable energy solutions is concerned, no positive change is seen in the overall level of deployment in the past two to three years. On the contrary, the number of renewable sites and the number of kilowatts (kW) generated may have decreased owing to various reasons. First, a few towers have been dismantled due to M&As, leading to a reduction in solarised towers. Second, with power load changes in nearby towers, some sites were required to be upgraded or downgraded for cost optimisation, but this did not happen. Third, with extremely low average revenues and financial distress, players in the operator community who were ultimately paying for energy called for a reimbursement model instead of the fixed-cost model, which would accelerate renewable adoption. Now, it is upon the RESCOs and towercos to convince operators of the benefits of staying on renewable energy, including lower and more predictable costs. Renewable energy and the RESCO model can be resurrected with the 5G roll-out. After being in status-quo mode during pandemic, the industry is now looking to increase its operational efficiency. There is optimism regarding the success of the RESCO model. However, extensive work needs to be done.
What, according to you, should be the focus area of towercos with regard to sustainability?
Tushar Kapadia
Towercos, telecom infracos, and O&M companies are implementing energy management solutions for benefitting telecos’ network operating costs. However, their challenge is to constantly improve efficiencies and pass on the benefits. Hence, energy management, which is a value-added service, is treated as reimbursement of costs with no incentives. They struggle every month to reconcile billing disputes to recover the legitimate costs from customers even after achieving a high level of uptime sites. A healthy ecosystem of infraco partners is critical to the success of telecom operations. For enabling infracos to invest in resources and technological solutions, it requires feasibility to recover costs. Globally, the problem of carbon emissions is widespread, and countries in the United Nations are still contemplating plans to make the world carbon-neutral by 2050. It would be unfair to expect telecom infracos to work in isolation for carbon emission control in India. The government’s clear directives and the right framework are necessary for the implementation of sustainability measures by all industrial sectors. This will require huge investments of resources, capex and mindsets to accept the new normal for price points that are necessary for justifying the expenditure.
During the pandemic, infracos worked hard to keep telecom networks running. Also, the average monthly data usage per subscriber increased substantially and so did the revenue for telcos. With this increased profitability of telcos, conditions are favourable to revise the reimbursement model of energy management services to compensate the ecosystem for their efforts. In summary, the RESCO model will succeed, but it will require a huge impetus from the government and all stakeholders.
