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Focus on Renewables: Business case for alternative energy solutions

October 31, 2011
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Rajiv Garg, Head, Telecom, Moser Baer

Today, the wish list of tower companies comprises reducing energy costs, increasing network uptime and making the network flexible in order to accommodate future expansion plans. Increasing their revenues and USP to stay ahead of competition is also a top priority for these companies.

The opex of a telecom site comprises energy-related costs (32 per cent), depreciation and cost of capital (38 per cent), security and taxes (10 per cent), rent (8 per cent), overheads (4 per cent), maintenance (5 per cent) and insurance (3 per cent).

According to data released by the Central Electricity Authority under the Ministry of Power, grid availability per day is the highest in circles like Gujarat (21.5 hours per day) Kerala (20.7 hours per day), Mumbai (20.7 hours per day) and Bihar (7.4 hours per day), and the lowest in Jharkhand (7.2 hours a day).

In this context, operators need to look at the various alternative energy options available. These include diesel, biofuel, solar energy, wind energy, fuel cells and natural gas.

However, a few things need to be considered before adopting an alternative energy source. To begin with, the future levellised cost of the source, along with its lifespan, should be carefully assessed. For example, before opting for diesel, its likely future cost and the lifespan of the diesel generator (DG) should be taken into consideration.

Second, the cost of the alternative energy source should be based on the number of useful units it yields, and not on its generation capacity. Third, the focus should be on making the energy source successful at the circle level.

In this context, solar energy is a feasible option for telecom sites. The infrastructure required can be easily installed at the site within a week, and only 10 square metres per kWp of space is required. Moreover, it is a modular system that is flexible enough to accommodate likely future expansion plans, and has a certified lifespan of 25 years and zero maintenance charges.

To provide an example of the potential energy savings of a site running on solar energy as opposed to one that runs on DG sets, a single outdoor base transceiver station site is considered. The site’s total power requirement is 7,884 kWh per year, of which about 3,833 kWh per year is provided by solar while the remaining is provided by the DG set. The running cost of the solar-DG hybrid is Rs 34 per unit, while that of running only the DG is Rs 67 per unit. The savings accrued by using the solar-DG hybrid versus the DG is Rs 33.15 per unit or 49 per cent.

A telecom cell site using alternative energy sources (wind, fuel cell, solar, etc.) can be based on three models: the opex model, wherein an alternative energy company provides the expertise; the capex model, wherein a tower company provides the expertise; and the energy service company (esco) model, where a fee is paid by the tower operator to the esco and the remuneration is directly tied to savings.

Yalla Veera Prakash, Head, R&D, ACME Telepower

Diesel and conventional energy costs are increasing at twice the growth rate of the telecom infrastructure industry’s revenues. There is an urgent need to reduce operating costs, bridge the urban-rural divide and formulate stronger regulations for climate control. This strengthens the business case for renewable energy technologies.

However, green energy solutions need to be adopted in a phased manner. This cannot be done either by getting energy supplied at grid rates to all sites in a single day, or by eliminating the use of diesel completely.

A holistic view of implementing green technology solutions entails the use of energy efficient products, energy monitoring and analytics, and adopting green practices and policies.

DC architecture is the best enabling set-up for green power as it reduces conversion losses. Also, a DC power source helps to handle an increase in load and a DC-based DG consumes 30-40 per cent less fuel than traditional generators.

Moreover, on the supply side, solutions like solar, fuel cells and multifuel powerhouse can be used. Solar-based solutions are available as ground- or tower-mounted variants. This is also available as a hybrid solution, which is a combination of solar-solar, solar-DCDG or solar-battery bank solutions.

Fuel cells are 2.5 kW-15 kW systems running on hydrogen and methanol fuel. They provide 45 per cent fuel efficiency as compared to the 18-22 per cent efficiency provided by DG sets, and help reduce opex by 30 per cent as compared to DG sets.

Further, a single multifuel cell can also be used, which can run on ethanol/biofuels/compressed natural gas (CNG)/liquefied petroleum gas (LPG)/pyrolysis oil.

Several storage solutions are also available. For example, lithium ion batteries reduce DG run-hours, offer significant savings in opex and are ready to be used outdoors.

On the demand side, green sites (both indoor and outdoor) can be developed. These are DC-powered site solutions that result in 35 per cent energy savings. Other options include eco-shelters, a power interface unit, battery coolers, an AC with no compressor and free cooling solutions.

Deployment of distributed power is slowly moving away from a traditional to a more modern approach. For instance, the outdoor mast-like structure is replacing the indoor retrofit structure of the site’s power plants. Also, community power plants, which are usually installed outdoors and have a capacity of over 10 kW, are moving to LightRadio configurations of over 1 kW.

There are a few preconditions for green technology to be successfully implemented. To begin with, the industry structure and business models need to be incentivised; the importance of reducing energy costs must be realised; and local customisation and serviceability of green solutions must be undertaken.

Manoj Kumar Singh, Vice-President, Technology, Indus Towers

The telecom industry’s carbon footprint (in the grid) has increased from an annual emission of 6.9 million tonnes (mt) of carbon dioxide to 10.6 mt. The diesel carbon footprint of the industry has also increased from 3 mt of carbon dioxide to 4.7 mt.

Worldwide, 0.7 per cent of greenhouse gas emissions originate from the telecom sector, while in India this figure stands at 1 per cent. Globally, 8 kg of carbon emissions are emitted by each subscriber as compared to 21 kg in India.

Therefore, the business case for renewable energy sources is strengthened further. Renewable energy options for the telecom sector include solar, wind, biomass, geothermal and fuel cells. Such sources provide clean and green energy; are silent energy sources; are free and infinitely available; are suitable for stand-alone applications; entail low maintenance costs; have a long lifespan; are relatively simple to use; and have a low carbon footprint.

The disadvantages of such sources of energy include high capex costs, nascent technologies, low efficiency, efficiency degradation and dependence on natural conditions.

In this scenario, therefore, operators should consider alternative energy options for the telecom sector. These include LPG, CNG and piped natural gas.

The way forward should entail a collaborative model, which would imply a partnership between the technology provider, the tower company and the government. To begin with, the technology provider would provide the technical know-how; the tower company would provide the business volumes, leading to a reduction in the price of the technology; and the government would provide financial aid to technology providers. Therefore, a renewable energy services company (resco) could step in to facilitate a further fall in prices by providing its competency. After a few years, the technology would mature and the vendors, the resco and the tower companies would grow, resulting in further reduction of cost. No further subsidy from the government would be required.

Net, net, energy sharing is the future of the sector. The concept of a green fuel hub is required, which means that the resco would provide services to all the leading infrastructure providers, including Viom Networks, Indus Towers, GTL, Bharti Infratel and ATC.


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