Cost savings – not social pressure - are driving telcos towards green energy

Cost savings – not social pressure - are driving telcos towards green energy

The telecoms sector has an indisputable impact on the environment. Operating a reliable network requires vast amounts of power, the manufacture of network equipment and personal devices produces significant carbon emissions, and the swift obsolescence of these devices generates a constant stream of e-waste.

With access to telecommunications increasingly viewed as a human right, the expansion of networks and proliferation of devices has raised awareness of the sector’s environmental impact, placing companies under increasing pressure to show leadership in achieving sustainability goals and adopting greener solutions.

While this trend has been gaining traction for years, there has been a pronounced shift towards sustainable solutions in recent years – and the main driving factor has not been social pressure, but cost savings. Companies are increasingly finding that it is not merely financially viable to adopt greener solutions, but attractively cheaper.

This is particularly the case with regards to energy. Enrique Dans, a Senior Fellow at the Centre for European Policy Analysis (CEPA), told us: “From my perspective, the most important factor here is cost. We are witnessing a huge decrease in the cost of renewable energy.”

Dans highlights that the key technologies for solar energy – panels and batteries – have both plummeted in terms of overall cost, with solar panels now 99% cheaper than 40 years ago, and batteries 97% cheaper. The efficiency of both technologies has also increased substantially, meaning that it’s now feasible for an operator to power several antennas at an isolated location with just a few solar panels and a battery.

He adds that this is a particularly attractive option in emerging markets as it facilitates the construction of self-sufficient, off-grid sites to enable reliable rural connectivity, and notes that operators in these regions are often able to obtain public funds or even grants from international agencies for deploying sustainable infrastructure projects.

Installation is now the most expensive element of a deployment – formerly, it was materials such as solar panels. This means solar energy is now viable on a widespread industrial scale, which in turn makes it feasible to extend technologies that typically require more reliable energy supplies to areas without grid power. Dans notes that 5G consumes a lot of energy in areas where there is a constant stream of connections, but in an isolated area the base station can remain idle a lot of the time, meaning that it consumes less energy.

Simay Akar, IEEE senior member and the CEO & Founder at AK Energy Consulting, notes that there are still significant challenges in the way of achieving sustainability goals, particularly in emerging markets. She highlights companies needing to integrate renewable energy systems into their infrastructure, noting that investment in these systems will facilitate on-site power generation, reducing dependence on grid power.

The benefits that this can be deliver will be amplified by coordinated collaboration: “It is not an individual effort - they need to follow the policies to collaborate for Power Purchase Agreements…long-term to have more efficient, stable and cost-efficient electricity for their supply and needs. It's also integrated to their grid - not every company has distributed systems, they're mostly connected to grids. If they have a distributed generation, they need to make sure they are focusing on their green grid infrastructure. That requires a lot of investment in the green modernization, and they need to focus on smart grid integration in their systems.”

Akar states that it’s not enough for operators to merely invest in renewable energy resources – they must also optimise their network efficiency by upgrading their infrastructure with digital tools including artificial intelligence management systems, cloud technologies, and software defined networks. She notes that by combining these technologies with cooling systems, the physical hardware’s power consumption can be dramatically reduced, but adds that intelligent use of energy storage systems is also essential.

“It’s important to integrate energy storage solutions if using renewable energy resources, because it's not [just] about the sustainable power we generate - this is also the business, they cannot have power outages.” Outages are not merely a matter of network availability – they are also a threat to data security, so it’s crucial for operators to understand the importance of energy stability and integrate these systems into their turnkey solutions – although Akar underlines the importance of selecting solutions that are suitable for both requirements and location.

“It's harder and more challenging in emerging markets than developed markets, because you need to know your investment in this area for sustainability will be profitable”, says Akar. “When you have government support incentives, this clean energy transition is always more straightforward, but for emerging markets there are also considerations of what we could do, and what are the opportunities.”

Akar observes that green financing is a promising area, noting that there is sustainable funding available in the form of green bonds, public private partnerships, and private equity. While there are few incentives around this, so it cannot make up for support for a green transition from the sector, she says that these resources are made possible via international collaboration and are typically targeted at emerging markets, so could be instrumental in enabling a transition to cleaner energy in the sector.

As more companies become able to generate power via mini-grids and off-grid solutions, they frequently have surplus to their requirements. With intelligent use of storage systems, Akar explains that they can sell this back to the grid, or alternatively simply store the energy and use it as required to address infrastructure gaps. Even if there are no supportive mechanisms in their local area, through this kind of collaboration it becomes possible for companies to have access to cost efficient energy resources.

“Even if it looks more challenging for emerging markets, there are more opportunities for the future … because implementing these steps can [help] reach sustainability goals and energy sustainability while reducing their operational costs”, explains Akar. “When we talk about all these initiatives, it sounds like we're investing a lot, but [whether] long term or short term, it's not really. And overall, by reaching these sustainability goals, they're also reducing their operational costs - this is important to see the opportunities, improve their energy supply, and make it more stable for their main business.”

The pressure is on – but the opportunities for real change are now viable. Dans observes that initial efforts around sustainability in telecoms amounted to little more than ‘greenwashing’, but underlines that the COP28 UN Climate Change Conference in Dubai, UAE delivered commitments that businesses are no longer able to skirt around. “Everyone was expecting a very low-profile conference, but in the end, the final documents are pretty stringent. They don't say stop fossil fuels - of course, that was predictable. But the commitments for increasing renewable energy are huge, they’re really important. And they demand a lot of investment.”


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