There are more than 3m telecom towers globally, and powering them is a $100bn market. It’s a particularly important growth sector in developing countries. They are already using mobiles to leapfrog the laying of costly landlines, but because they lack grids that stretch to remote communities they need to power towers that are off the grid. Dr Thomas Hillig says as solar and storage costs continue to drop they are replacing diesel gensets as the preferred option.
Telecom companies like AT&T, T-Mobile, BT, Euskaltel, and Telstra have signed some of the biggest corporate power purchase agreements (PPAs) to date. Telecommunications giant AT&T is ranked second in corporate PPAs and BT is only one step short of being 100% renewable on paper. A recent IRENA report reveals, however, that globally, telecommunications companies only cover around 7% of their electricity needs with renewable energy resources and only 26% of the analyzed telecom companies had renewable energy targets.
Also, one industry trend is the outsourcing of telecom towers. Tower companies build, operate, and maintain these assets – often on behalf of several telecom operators. This means at the same time that the corresponding emissions are normally not attributed to the telecom companies themselves. Public pressure is considerably lower for outsourced C02 emission.
The case for on-site renewable generation
Powering telecom towers with renewables is a great opportunity – especially for towers in remote locations. Typically, these towers run on diesel gensets that require significant costs for operation and maintenance. The recent price decrease of solar and batteries allows at least for partially replacing diesel by renewable energy sources.
Several new initiatives have been announced in the past years. For instance in Congo, GreenWish is converting 300 telecom towers for Orange from diesel to solar battery solutions. They are expected to improve reliability of power and reduce by 70% diesel consumption. In Myanmar, MNTI has selected Voltalia to provide power to 171 telecom towers in the regions of Bago and Ayeyarwaddy. 80% of these towers are off-grid. One of the pioneers in solarizing telecom towers comes from India. OMC announced a cooperation with Bharti Infratel back in 2012. Since then they have electrified many telecom towers in remote India and have extended the business model to include power supply to surrounding villages.
Powering towers: a $100bn business
Experts estimate that globally there are more than 3 million telecom towers and that figure is rising. It has become obvious that the potential for renewable energy solutions is therefore huge. This also applies for energy storage as telecommunication applications require extremely high availabilities. The total market for powering all these towers is estimated at far beyond $100 billion (assuming it costs a minimum of $35,000/year on average to power a tower).
The extreme price decrease of renewables makes onsite solar and wind energy often less expensive than electricity from the grid. The approach is straightforward: when onsite power is available, it will be used for the tower, if not, electricity will be used. If there is an outage, the back-up gensets provide an emergency supply.
Off-grid telecom towers: swapping diesel for renewables
The business case is even more favorable for off-grid towers. In a first step, diesel gensets still run 24 hours to generate a spinning reserve in case a solar array is shaded, or the wind stops. In a second step, renewables can be integrated in a way that diesel gensets are switched off during sunny or windy periods so that the tower fully relies on solar or wind energy. When solar or wind outputs do not meet the power requirements of the tower, energy storage acts as a bridge to start the back-up diesel gensets. Finally, adding even more solar or wind power would mean that the towers are powered also during night-time or during less windy periods by renewable energy that is stored in large amounts. Back-up diesel gensets would only be required in case of very unfavorable seasonality. Innovative companies also have developed concepts of combining the renewable energy-based power generation for telecom towers and neighboring villages.
The biggest hurdle is the high investment requirements for renewables. However, more and more independent power producers (IPPs) are entering the market and are willing to invest in renewable energy and storage assets. They would then sell back the electricity to the tower operators – i.e., either the tower company or the telecom operator. If this becomes a template for powering towers then it will accelerate the transition to renewables for telecoms.
Dr Thomas Hillig is the founder and managing director of THEnergy, a boutique consultancy focusing on microgrids/mini-grids and off-grid renewable energy.