Energy costs can primarily be segregated into diesel cost and power costs.

Diesel consumption: Operators are consider­ing how to reduce the diesel consumption of electricity generators at mobile base station sites and cut their opex. Fuel costs can represent 20-40 per cent of a typical mobile operator’s radio network opex. Continuing rapid growth in mobile broadband traffic will cause a dramatic increase in operators’ power requirements and costs.

Diesel prices: Diesel prices are highly volatile and are expected to continue to rise overall. Moreover, diesel must be provisioned, transported, stored and sec­ured, and it produces large amounts of carbon dioxide when burnt. But when electricity grid access is not available or the quality of electricity supply is poor, diesel may be the only practical solution. Government is already thinking to de-regulate the diesel prices. This move can further push the Energy expenses upwards.

Power shortages ensure that prices will never come down. India has 12 per cent power shortage. While 80 percent of Indian villages have at least an electricity line, less than 52.5 per cent of rural households have access to electricity. In urban areas, the access to elec­tricity was 93.1 per cent in 2008. Due to the precarious power situation, about 40 per cent of the telecom towers have grid or Electricity Board power availability of less than 12 hours.

There are about 25 per cent towers in the country which have access to power supply for less than 12 hrs. These towers have about 60 per cent of the total diesel consumption by telecom towers in India.

Intelligent Energy Management: Energy management products are available in the market and can reduce consumption by reducing the consumption on the dem­and side. Major tower management companies in India have started to invest in these Energy Management Solutions.

Alternative energy options including solar and wind energy can address the challenge of unavailability of reliable power supply in semi-urban, rural and remote areas, thus enabling telecom connectivity for the remote parts of the country. Renewable energy (RE) has the potential to reduce the opex by 25-60 percent if a viable business model is devised. An estimate for 120,000 tele­com towers in rural areas that run on diesel gensets (DGs) for almost 12 hours a day consuming 24 litres of diesel indicates the cost of running these towers to Rs 300 crore per month. It has become imperative for the telecom operators to look for alternative sources of fuel to run these stations, such as solar power, wind power, biodiesel and biogas, which may provide feasible solutions to the problem and also contribute towards a greener environment with zero emissions. Most tower sharing companies have started to evaluate the business cases for alternative source of energies.

Pilots with all the alternate sources of energy are underway, but solar is the most matured of the technologies. Around 40 per cent of the telecom towers in the country have power availability for less than 10 hours. All these towers are potential sites to be powered through renewable sources of energy. But the capex required setting up the Solar-EB-battery hybrid still remains high for a viable business model.

Based on the assumption as detailed in the TRAI Consultation Paper No 3/2011, one diesel generator consumes approximately two litres of diesel per hour. Considering running generator for 12 hours a day at existing cost of diesel fuel (Rs 42 per litre), the total expense per tower per day would be approximately Rs 1,008. Therefore if renewable energy sources are con­sidered, the minimum saving would be about Rs 1,008 per day. Apart from this, regular maintenance expenses can also be saved substantially. Using renewable energy power means, saving of 8,760 litres of diesel fuel per tower per year, which in other words, reduction of emission of 23,652 kgs of CO2 (as per TRAI, 1 Kg diesel equals 2.7 kgs CO2) from a single tower.

Recommendations  :

The cost of setting up solutions based on alternate source of energy: The cost of setting up a site on RE is still very high. As per the estimates, converting the existing site to Solar-DG-battery hybrid site can cost as much as Rs 28 lakh which impacts commercial viability.

• Government subsidy/incentives for deployment of renewable sources of energy will promote projects on renewable sources of energy.
• The capex involved in setting up of RE infrastruc­ture should be fully subsidised by the appropriate authorities. The government should aggressively enc­ourage the use of RE by extending support in various forms like capital expenditure subsidy, concessional rates for various government levies/taxes etc.
• All renewable sources of energy should be free of customs and excise tariffs to maximise uptake of these technologies.
• Each solar panel costs about Rs 28 lakh. If the gov­ernment gives the subsidies sooner, companies would be able to roll out towers based on alternative energy faster.
• Long-term global binding: Establishing binding glo­bal long-term targets for the reduction of GHG emissions is the most urgent need. Greenhouse gas cap and trade schemes should deliver a stable and effective long-term price for carbon credit. A good Carbon Credit Policy will help the Industry invest in cleaner technology such as solar, wind, biogas, etc.
• To support new green technology technologies development through (R&D and commercialisation) pilots, governments should use grants, soft loans and other incentives to encourage the increased deploy­ment of green technologies.

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Author of this topic is a senior consultants in Telecom Consulting Practice