A combination of circumstances has led to a greater focus on “green” and environmentally sustainable telecom, globally as well as in India. Given the need to cut greenhouse gas (GHG) emissions, telecom has to be a prime target because it is one of the largest consumers of power, and fossil fuels.
Globally, telecom and, in a more extended manner, the information and communication technology (ICT) sector account for roughly twice as much CO2 emissions as the civil aviation industry. The digitalisation of business processes due to work from home and other remote work protocols has also led to an increase in energy demand from telecom infrastructure, as many of these new processes show signs of becoming permanent.
As 5G networks roll out, the carbon footprint of the ICT sector could increase again, unless a deliberate effort is made to reduce it. This is because the increased number of use cases with 5G will inevitably mean more investments in data centres, and the setting up of more mobile sites.
The Ukraine war has led to spikes in the already high fossil fuel prices – coal, natural gas and crude have jumped to multiyear highs due to fear of supply disruptions. Assuming that global demand for energy will also rise as economic activity recovers from the pandemic, fuel prices will continue to remain high. The pandemic lockdowns also showed that smog and other forms of environmental pollution clear quickly when emissions come down. This has created a positive constituency for sustainable operations as well.
Telecom infrastructure requires access to steady, uninterrupted power to maintain operations across networks, data centres, cloud operations, etc. That means, among other things, building power backup systems and redundancies into power supplies, especially in environments such as India where power supply can be intermittent as well as uncertain in terms of quality.
Energy costs can contribute up to 25-40 per cent of the operational costs of running telecom networks – this works out to around 7 per cent of total expenditure for Indian telcos, once spectrum costs and debt servicing are taken into account.
India has the second largest telecom subscriber base and is the largest user of data. The CO2 equivalent emission levels from the Indian mobile telecom sector have jumped and will rise further unless service providers make serious efforts to move towards environmental sustainability.
Sustainability is, therefore, a subject of strategic interest. It is both a major cost centre and hence an area that offers scope for cost savings. It requires organisations to make strategically important choices in terms of adopting new technologies. In addition to lowering its own carbon footprint, telecom/ICT can also play a big role in lowering emissions among users and suppliers.
Smart ways to work, especially in emission-heavy industries such as logistics, transport, automobiles and aviation design, can be enabled by telecom and digital players that deliver solutions. This has a multiplier effect in that it enables users to reduce emissions to a greater degree. In addition to the energy components, telecom can also contribute to sustainability by adopting smart and responsible e-waste policies.
In India’s telecom industry, there has been steady movement on the policy front to encourage green, sustainable practices with the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT) releasing consultancy papers on the subject and clarifying their respective positions, which are aligned to India’s broader commitments to fighting climate change.
As far as the major service providers are concerned, Reliance Jio is part of a large conglomerate, which has ambitious plans to go carbon neutral with vast investments in fuel cell hydrogen technologies and other renewable options. Jio, presumably, will also be focused on sustainable operations given the clearly stated goals of the parent.
Bharti Airtel has also taken a series of steps towards emission reductions, via investments in renewable energy firms and by committing to the global alliance for reducing emissions – the Science Based Targets initiative’s Business Ambition for 1.5 °C campaign. This is a partnership between CDP, the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature. (CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.)
Meanwhile, Vodafone Idea used to release a sustainability report, which listed the emission reduction, energy savings and renewable power initiatives it takes.
Telecom operators need to analyse their networks to accurately estimate the areas of energy intensity and the emissions status. Artificial intelligence-based analysis of energy usage across the network can identify areas where energy savings are possible. Most network designs and operating processes can be improved to significantly reduce waste heat and save energy alongside adopting renewable technologies for meeting energy demands.
Telcos generate relatively few Scope 1 emissions (those generated from direct burning of fossil fuels), although this happens where diesel gensets are used as backup for power. (The Indian telecom industry consumes more diesel than the railways.) To a large extent, this can be obviated by adopting renewable power sources such as solar.
Scope 2 emissions are defined as the emissions resulting from power purchases off the grid (which is largely thermal in India). Scope 3 emissions are caused by downstream and upstream activities, including the energy consumption of suppliers to the industry as well as the consumption of users of services.
There is scope for both energy savings as well as emission reduction across this entire chain, especially where Scope 1 and Scope 3 emissions are concerned. For example, Scope 1 emission reductions can be achieved by switching to renewables.
Scope 3 emission reduction is potentially the area through which telcos can make a really big impact on the broader economy. One way is to work with suppliers to improve their energy efficiency and decrease upstream emissions. Downstream too, telcos can help user industries become far more energy efficient.
Smart products and solutions from telcos, such as smart agriculture and smart logistics solutions, can help reduce downstream emissions by many multiples of the telecom industry’s own emissions. Telcos could also play a role in helping companies virtualise and dematerialise – CADCAM and software-based processes can obviate, or reduce the need to build experimental prototypes of many things such as in aviation, ship design and architecture.
What’s more, there’s a strong business case for telcos pushing such enterprise solutions, since these are revenue earners for service providers. Better data centre design and management for cloud-based services can also contribute to energy savings and emission reductions.
Most telcos adhere to the GSMA target of being carbon neutral by 2050. Most have set specific 2030 targets for emissions, waste management and renewable energy share. Some EU telcos have already reached their net carbon-neutral goals.
Telecom companies need to set targets such as a time frame for going net carbon zero, as well as specific waste reduction targets. It may help to create an internal culture where such targets are tied to compensation. They need to maintain transparency in reporting, including external audits of energy and emissions, and to apply sustainability principles in the selection of suppliers, the choice of equipment and network design, and in monitoring the supply chain’s impact. Downstream, telcos can try to enable ICT offerings to help enterprise customers cut energy consumption. Such offerings include digitalisation and dematerialisation of products and energy efficient data processing.
The ICT segment has seen steady movement. For example, leading digital ICT solutions provider Sify Technologies has made a major commitment to use renewable energy for its data centre portfolio. The company has concluded power purchase agreements (PPAs) with Vibrant Energy Holdings, a majority-owned subsidiary of Blue Leaf Energy Asia Pvt. Ltd. The PPAs are for 231 MW of solar and wind energy capacity to power Sify’s hyperscale data centres. By investing in solar and wind energy, Sify hopes to meet most of its power demands from renewable sources.
Global consultant Boston Consulting Group has tried to put together a sustainable index for telecom services and, of course, large investments have flowed into renewables from venture capitalists, private equity firms and global investment groups. Among telecom service providers, Bharti Airtel recently acquired a 9 per cent stake in Avaada Clean TN Project, a renewable energy firm, as part of its efforts to improve sustainability.
Airtel’s sustainability timeline indicates how a targeted plan for sustainability could work. We can examine the period between 2014-15 and 2020-21, when the Airtel subscriber base rose from 225 million (March 2015) to 321 million (March 2021), and smartphone penetration and data usage increased multifold.
In 2014-15, Airtel consumed over 21 million litres of diesel. This dropped to 16 million litres by 2020-21. Energy consumption (non-renewable) rose from 707 GWh in 2014-15 to 1,310 GWh in 2020-21. But renewable energy consumption also rose, from 60 GWh in 2014-15 to 83 GWh in 2020-21. Direct GHG emissions dropped from 56,900 tonnes of CO2 equivalent in 2014-15 to 42,955 tonnes in 2020-21. However, indirect GHG emissions rose from 404,852 tonnes in 2014-15 to 880,859 tonnes in 2020-21. Carbon emissions per terabyte dropped from 8.4 tonnes to 0.16 tonnes during this period. This data indicates that Airtel has been fairly successful in tackling and reducing its emissions footprint but, of course, more needs to be done.
The thrust towards sustainability represents an opportunity to do something positive towards tackling climate change. It is also a business opportunity for enterprises across the telecom and ICT value chain. By cutting energy demand and the carbon emission footprint, enterprises can generate cost savings and profits as well.