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Energy Management Priority: Key trends and industry initiatives

November 17, 2015
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The Indian telecom industry marked a major milestone in 2015 when the country’s subscriber base crossed the 1 billion mark. This feat was achieved due to the robust telecom tower infrastructure traversing the length and breadth of the country, operating uninterrupted on a 24x7 basis. However, given the poor grid conditions in most parts of the country, ensuring an uninterrupted grid power supply to these towers without any backup sources is next to impossible as most states continue to face long and sporadic power cuts. As per industry reports, about 70 per cent of India’s 500,000 telecom towers experience power outages of approximately eight hours per day. Unreliable grid conditions have resulted in tower companies relying heavily on diesel generators (DGs) as main backup sources. However, the high cost of diesel (double the grid power cost in certain states) has resulted in a severe cash burn, hitting the bottom line of companies in a big way.

Energy currently accounts for about a third of a tower site’s operational expenditure. The majority of the total expenditure incurred on energy goes towards diesel procurement. Logistical costs and instances of diesel pilferage have further increased the cost of fuel for companies. Diesel requirements have also shot up in recent years as operators have rolled out more towers with higher capacities to accommodate the growing data services demand.

Thus, managing the growing energy requirements of tower sites in a cost-effective manner is a mammoth task and a necessary one for Indian telecom tower companies. Today, energy management features among the top priorities of telecom tower infrastructure providers, who have adopted several practices and solutions to address the energy challenges on the demand as well as supply side. They are aiming to keep their future energy requirements under control as well as manage their current consumption more effectively.

To this end, tower companies and operators have experimented with a host of solutions and strategies, ranging from indoor-to-outdoor site conversions, free cooling units, DG-battery hybrids, optimally sized DG sets, new energy storage techniques and products, and renewable energy technologies. The use of analytics to study the energy consumption patterns of towers is gaining traction as players are deploying remote site-sensing techniques for this purpose.

As entire energy management processes at tower sites become complex and complicated, there is a growing trend among industry players to partner with companies that specialise in energy management to look after or manage their end-to-end energy requirements and consumption, either through contracts or by outsourcing the energy business. GTL and Essential Energy’s ongoing deal, in which the latter is going to take over the tower company’s energy management vertical, is a positive step. The £1.2 billion deal will result in Essential Energy, the Indian arm of the global group Intelligent Energy, acquiring GTL’s operations, maintenance and energy management business. Under its terms, Essential Energy will provide efficient, economical and clean power to GTL’s 27,400 telecom towers in India over a 10-year period.

The key trends and industry initiatives in this space are as follows:

Reducing air-conditioning needs

Conventionally, most tower sites in India had indoor shelters with base transceiver stations (BTSs), which have low optimal operating temperatures and require air conditioning for smooth operations. Air conditioners often impose a higher load than the BTSs themselves, and typically account for 25-30 per cent of energy consumption in an indoor site.

In such a scenario, the indoor-to-outdoor conversion of a site has emerged as a widely adopted strategy as it either significantly reduces the need for air conditioning or totally eliminates it. While converting a site, the BTS continues to stay in the shelter but air gets channelised through the installation of a free cooling unit (FCU). FCUs are low-cost innovative products that throw the inside air out and push in filtered fresh air from outside.

Indus Towers recently announced that it has converted 50,000 of its 115,000 towers to outdoor sites, eliminating the need for air conditioners and thereby reducing energy consumption. Meanwhile, as of November 2014, Tata Teleservices Limited (TTSL) had installed outdoor cabinets at 3,000 sites, realising savings of Rs 0.14 billion. In addition, FCUs have been installed at 4,000 sites.

Energy storage products

Batteries have been used as a backup source to ensure uninterrupted power supply at tower sites. Traditionally, heavier and bigger valve-regulated lead acid batteries were used to provide back up to BTSs but they have limitations like short discharge times, long charging times, a short life, cell pilferage issues and the requirement of air conditioning at high temperatures. They are also bulky and pose space issues as the rental charges for tower sites are going up. Moreover, most of the older models need manual interventions in their maintenance.

Over the past few years, battery manufacturers have paid heed to the aforementioned shortcomings and come up with new battery models that charge fast, require less space per kW, and have a higher round-trip efficiency. As a result, tower operators are now integrating storage systems with intelligent energy systems, especially at remote sites, to remove the dependence on the unreliable grid and DGs. Viom Networks has been running trials and experiments on various technologies, including rechargeable batteries like lithium-ion (Li-ion) and lead acid; flow batteries; thermal energy storage; and protection circuit module batteries to meet the growing demand for air conditioning during peak hours, fuel cells and compressed air storage.

Li-ion batteries have emerged as the ideal technology solution for most tower companies. They have long discharge times, short charging times, a long life and do not require air conditioning up to very high temperatures. They are also compact and occupy half the space in comparison with traditional batteries, thus leaving enough room for more telecom equipment, particularly in 4G networks. As the deployment of micro base stations increases, Li-ion batteries will serve as the best power solution as their light weight allows them to be easily lifted to the micro base station’s vertical deployment.

Reliance Jio Infocomm Limited has installed Li-ion batteries across its 25,000 towers instead of the more traditional lead acid batteries and DGs. Bharti Infratel and Indus Towers are also testing Li-ion batteries. As per the Tower and Infrastructure Providers Association, about 100,000 Li-ion battery modules have been deployed across operators and tower companies.

However, the biggest problem with these new technologies is their high replacement cost. Unless they are priced in the same range as lead acid batteries, it will be difficult to adopt the newer solutions, particularly given that tower operators are yet to establish the performance of new systems in the long run. Moreover, there are issues related to the suitability and compatibility of new technologies with existing site infrastructures, as well as limited field support. Li-ion systems have three aspects: cells and their bundling; sensors for each cell; and the battery management system. Each of these elements needs regular maintenance but none of them are standardised. Every supplier has a different design, which makes the support system questionable.

Green power

Over the past few years, industry players have warmed to the idea of deploying renewable energy solutions as a potential alternative to conventional sources of power at tower sites. To begin with, there has been constant social pressure to reduce carbon emissions from DGs. As per reports from the Department of Telecommunications (DoT), 80-90 per cent of the power requirements of rural towers are currently met by DGs, each of which consumes 8,760 litres of diesel per year if it runs eight hours a day. It is estimated that 5.12 billion litres of diesel is consumed by telecom towers annually, and the resulting emissions total around 10 million tonnes of carbon dioxide.

Another factor encouraging the uptake of green power is that the cost economics pertaining to sources like solar and wind have improved significantly in recent years, resulting in several, though small–scale, deployments. By far, solar has emerged as the most deployable and favourable technology in the green domain. The industry is now also ready to experiment with new technologies like fuel cells and biomass.

In its investor presentation for August 2015, Bharti Infratel stated that the company has over 2,900 solar-powered towers with an installed capacity of over 11 MW. TTSL currently has 50-odd sites that run on solar energy.

The biggest push is expected to come in the form of the government’s mandate on green telecom, which requires tower companies and operators to run 75 per cent and 33 per cent of their towers on hybrid sources in rural and urban areas respectively. Achieving this is going to be a daunting task, considering the current level of deployment. As per industry reports, only 5,000 towers in the country currently operate on the hybrid model. In an attempt to push telecom companies to invest more in green energy technologies, DoT plans to provide easy bank financing by way of softer interest rates and longer loan tenors.

Outsourcing energy needs

Outsourcing the energy management function to focus on core tower operations has been on the agenda of tower companies for the past few years. Time and again, these companies have been vocal about the growing energy challenges and their inability to counter them. They have insisted that they are not power companies and are thus not the best or most suitable entities to manage power requirements. This has resulted in the mushrooming of various companies focusing on managing either end-to-end energy requirements or catering to specific requirements at tower sites. They often use analytical tools to help operators gauge and indentify anomalies in their current systems. As per industry statistics, the monitoring of energy consumption could increase asset life by 10 per cent, while the improvement in operational efficiency through actionable intelligence is estimated to be 20 per cent.

GTL’s recent sale of its business unit to Essential Energy is being considered a key move that will give traction to the trend of outsourcing/hiving off energy divisions by tower companies to specialised players in the energy domain. Apart from giving a push to energy management outsourcing activity in the industry, the deal is being seen as a harbinger for encouraging the uptake of hydrogen-based fuel cells to power telecom towers in India. Fuel cells, though considered to be more efficient, cleaner and even economical on a total cost of ownership basis than DGs, have seen little uptake in the Indian industry so far.

Future outlook

The state of power availability in the country is unlikely to reverse overnight or in the near future. Thus, the industry’s only choice is to devise smart energy strategies and deploy innovative and cost-efficient solutions to better manage and cater to energy needs.

Doing away with DGs from all sites will take many years, but the need of the hour is to optimise DG usage by using these systems in hybrid form with other technologies. In the future, a hybrid technology that addresses the cost-effectiveness and challenges of all of these technologies needs to be developed as a viable option for the telecom tower industry. Hybrids of solar photovoltaic, biogasifiers, DGs and batteries are already in commercial use by many tower infrastructure companies. Energy storage solutions will play a key role, especially with industry players showing a commitment to the deployment of green energy technologies.

With the government’s recent approval to spectrum trading and sharing, it is expected that the roll-out of greenfield towers could take a slight hit. The industry is also pushing for sharing active equipment installed at towers among operators and tower companies, which will bring down energy consumption to an extent.

These developments together are likely to keep in check the energy requirement of the tower infrastructure industry in the coming years.

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