Over the years, energy management has emerged as a key area of concern for the telecom tower industry. As diesel-run generators (DGs) are proving to be not only extremely expensive but also damaging to the environment, the industry is moving away from its dependence on DGs towards a host of solutions and strategies including energy efficient equipment, hybrid solutions, green energy deployments and energy storage solutions. Tower companies such as Indus Towers, Bharti Infratel and GTL Infrastructure Limited are making significant efforts to reduce energy consumption at tower sites. While Indus Towers has reduced its diesel consumption by half over the past five years, Bharti Infratel has reduced it by 31 per cent in the past three years. Further, there has also been a shift in the fundamental business model with the tower industry warming up to the idea of outsourcing energy management services to specialised players.
A look at the energy management trends in the tower industry and the future outlook for the segment…
Energy management and optimisation trends
Tower companies have started adopting numerous strategies to bring down their energy consumption and achieve operational efficiency. These include:
- Heat management at sites: This involves the conversion of indoor sites to outdoor ones. The replacement of air conditioners (ACs) by free cooling units and natural cooling units has led to a significant decline in energy consumption at tower sites. In addition, the use of advanced, energy efficient and high-temperature-tolerant outdoor base transceiver stations (BTSs) has helped in reducing the energy outlay of tower companies.
- Indus Towers, which has pledged to become diesel-free by 2021, has removed more than 70,000 ACs and reduced over 10 million tonnes (mt) of CO2 emissions during the past five years. As per its sustainability report for 2016-17, Indus Towers converted a total of 14,423 indoor sites to outdoor ones. Further, Bharti Infratel, which began an initiative to convert indoor sites to outdoor ones in 2012, now has more than 70 per cent of its sites located outdoors.
- Energy storage: Given the erratic power supply situation in various pockets of the country, backup energy storage solutions have gained traction in recent years. The tower industry has deployed a range of energy storage solutions such as lithium-ion batteries (Li-ion), valve-regulated lead acid (VRLA) batteries, lead acid batteries, flow batteries, thermal energy storage solutions and protection circuit module batteries.
- Bharti Infratel has added VRLA and VRLA plus lithium-based solutions to its existing solutions bucket . Further, GTL Infrastructure Limited has deployed deep discharge and Li-ion batteries for faster charging and optimal use of backup power and small capacity DC-type DGs at pilot sites.
- Renewable energy solutions: Another upcoming trend is the use of renewable energy solutions at tower sites, which offers significant benefits in terms of opex. Among green energy options, solar solutions are witnessing significant traction owing to a substantial decline in the cost of panels. Further, wind and biomass sources are also being tapped at tower sites.
- According to Indus Towers’ officials, a total of 66,465 sites, which comprise about 52 per cent of the company’s towers, are being powered by renewable sources as of February 2018. Further, the company has deployed solar and biomass energy solutions at approximately 11,000 sites over the past three years and aims to cover 50 per cent of its total towers by 2021. It intends to incorporate solar and wind technologies at its telecom tower sites as part of its long-term power strategy. Further, Bharti Infratel has installed 14,193 green sites and more than 2,500 solar towers across states as of March 2018.
- Hybrid solutions: Many tower companies are optimising their current DG usage through the adoption of hybrid solutions, which comprise a combination of solar photovoltaic batteries, DGs and the grid. These solutions work on intelligent control algorithms that help service load in different energy availability conditions. ATC India is in the process of setting up captive hybrid solar systems at sites where DGs run for longer durations. Initially, the project will focus on off-grid towers that have higher diesel usage. Currently, solar panels averaging 4.4 kW peak capacity have been installed at more than 450 sites in Bihar, Uttar Pradesh, Odisha and West Bengal. The total installed solar capacity across all tower sites in the country has surpassed 2 MW peak, which has brought down the carbon footprint considerably.
- Active systems management: This strategy involves putting the BTSs and associated cabinets and extra transmitters into sleep mode during periods of low data and voice traffic so as to reduce the energy consumption.
- Shift towards O&M and remote site monitoring: Over time, the industry has witnessed the emergence of specialised operations and management (O&M) companies. These cater to specific, or, in some cases, end-to-end energy requirements at tower sites. They typically use analytical tools to help operators identify anomalies in their systems and undertake remote site monitoring. The key advantage offered by remote site monitoring is the availability of real-time information on tower site performance and its energy consumption pattern.
The industry’s recent steps to move beyond its dependence on the grid and DGs through the use of hybrid, high efficiency and energy storage solutions are commendable. However, certain challenges hampering the adoption of energy management solutions still need to be addressed. The high capex associated with new high efficiency storage solutions continues to be a key hurdle in the wide-scale adoption of these solutions. Given the length and breadth of the country across which telecom towers are deployed, each one of them is unique in terms of configuration, number of BTSs, load requirement, grid power availability and prevailing weather conditions. Therefore, it becomes difficult to adopt the one-size-fits-all approach. In addition, companies have to undertake several trial runs before arriving at the best fit for a particular site.
Even with renewable energy technologies, high capex requirements have led to their adoption only on a limited scale. Although “go green” has been a popular theme in the telecom space for some time, till now, only 25 per cent of the mobile towers in the country run on renewable sources of energy. Further, financial constraints have discouraged operators from investing in green energy solutions. Another challenge is the lack of returns on investment in renewable sources. This is because the initial capex in setting up renewable energy systems is significant while returns from them are uncertain.
Stringent government laws also pose a big challenge to the industry. The government’s mandate to use renewable energy solutions is only with respect to the telecom infrastructure segment. However, in order to address the carbon footprint issue, the entire industry should be taken into consideration. Therefore, even though some progress has been made in adopting energy management solutions, the speed of adoption continues to be slow.
The way forward
Challenges notwithstanding, optimisation of energy costs appears to be at the forefront of industry attention. More and more players are now looking at ways to contain costs and de-risk themselves from fluctuations in diesel prices and grid availability. Going forward, we can expect to see an increase in the conversion of indoor sites to outdoor ones and the adoption of state-of-the-art energy storage solutions to reduce the sector’s dependence on diesel, which, with its increasing prices, has put undue financial pressure on operators. Significant advancements in the renewable energy sector can be expected to reduce costs and increase the attractiveness of these energy sources. With the government’s focus on renewable energy, these technologies could mature sooner than expected, in turn increasing their commercial viability.