Against the backdrop of elevated energy costs, it should not be surprising that sustainability is a top strategic priority for mobile operators. And, sure enough, that is exactly what we hear from them, with sustainability ranking as a top operator network business priority, alongside security and regulatory compliance. The reality, however, is that sustainability is about much more than fuel bills for operators: across the globe, nearly 70 per cent have made net zero commitments, with more than half looking at timelines by 2040. At the same time, the success of virtual power plant models in other industries provides operators with a new opportunity to consider in balancing energy efficiency and revenue generation imperatives.
Given the critical importance of sustainability to operators, it was only natural for GSMA Intelligence to support Huawei’s Global ICT Energy Efficiency Summit held towards the end of October in Bordeaux, France. Putting the title’s focus on efficiency aside, it was an incredible opportunity to hear how operators and other industry leaders were advancing the discussion of sustainability. Some of the data and insights shared were expected (though still worth repeating) and some were relatively novel and exciting for industry.
- 5G’s role in sustainability. No operator sustainability discussion circa 2023 can progress without an upfront discussion of 5G if only because of the rapid rollout of 5G networks and uptake of 5G services across the globe. By now, most of us know the 5G story in terms of energy and energy efficiency: compared with previous technology generations, 5G is more efficient on an energy per data transmitted basis, but it also drives a major increase in network traffic. Despite being efficient, this implies an increase in energy consumption, forcing operators to look for new efficiencies across their operations.
- Where are the network efficiencies. If 5G deployment drives a deeper investigation into network energy efficiency, operators need to know the options available. Network sleep and AI-powered shutdown solutions get a lot of attention, and Huawei has been very vocal on this front, promoting its Zero Bit, Zero Watt innovations as we discussed in a GSMA Intelligence Data Point video following the vendor’s Mobile Broadband Forum. Beyond turning down network elements when not in use, however, we heard about myriad other options. Efficient site solutions which limit cooling demands and minimise truck rolls. Multi-band radio and antenna solutions. Intelligent energy storage. It is a big menu. But that is important given the diversity of operator networks and the magnitude of the challenge.
- When energy efficiency met renewables. As important as energy efficiency is to operator network thinking (particularly in the 5G era), it was agreed renewable energy sourcing needs to be included in operator sustainability strategies. Telefonica Hispanomerica did a remarkable job in elaborating on this point, noting how its use of hybrid power sources allowed it to surpass its sustainability goals in short order. Yet, where operator use of renewable energy might bring to mind the deployment of solar panels at remote cell sites, we also got plenty of reminders that renewables usage needs to include more than just power generated by operators themselves (exempli gratia, solar cells at towers), but also green energy purchased from other generators, potentially through long-term power purchase agreements.
- Storing versus selling: virtual power plants. From a pre-event workshop to multiple presentations at the event itself, the opportunity for operators to use site infrastructure as virtual power plant (VPP) infrastructure was probably the most discussed topic in Bordeaux. For the uninitiated (including most of the telecom industry), the concept of a VPP is simple: where energy storage assets can be connected into the electrical grid, they can potentially be used to store and sell excess energy reserves. From a consumer perspective, that might mean making money from solar-generated energy and home battery systems, or even electric car batteries charged when grid pricing is favourable. From an operator perspective, that might mean employing backup batteries at sites benefitting from favourable grid or PPA pricing. The use cases are also relatively straightforward, balancing out peak electricity costs or arbitraging low- versus high-cost electricity sourcing to generate a new revenue stream. As operators around the world continue to look for ways to make money from 5G, any new revenue opportunities are bound to be attractive.
- VPP risks and opportunities. That does not mean, of course, that VPP models are not without risks. Operators will need a clear understanding of how much backup battery capacity they truly need compared with how much can be turned into revenue, how electricity costs may vary in the long-term compared with the short and how local regulations impact their VPP options. The key message from the event, however, was that the VPP business model is not new. It might be new to operators. But as they look to potential upgrades of their site and energy storage infrastructure, they can look to diverse industries in diverse markets around the world who are already putting these models into place, often alongside aggregators who remove some of the risks, to decide whether it is an opportunity for them. At the same time, Huawei was quick to point out the lessons from these industries have informed their VPP solutions which can mitigate any risks with the deployment of the vendor’s VPP Energy Scheduling platform alongside battery upgrades if needed.
If there was one common theme across all the presentations, it was a relatively simple one: operator network sustainability is more important than ever. The onward march of societal digital transformation means that energy demands will only continue to rise. War and political instability, meanwhile, can drive energy costs to the point where they drastically impact operator profits, particularly in emerging markets where pricing can be exacerbated by currency devaluations. The use of renewables can help to diversify energy supply options, but renewable output can suffer from weather-related variability impacting grid stability. Together, this drives the network sustainability imperative, pushing operators to engage on new energy efficiency innovations, storage strategies and power-focused business models like VPP.
And, if there was one common recommendation across all the presentations, it was the need to think holistically. Hoped-for efficiency improvements will not materialise thanks to one single network innovation. Renewables need to be included in sustainability planning. Here, too, the plans need to be comprehensive, including the deployment of renewable solutions alongside renewable sourcing through power purchase agreements. Beyond network usage, network impacts need to be considered from a circular economy perspective not to mention a power generation perspective which could well benefit other industries and support an operator’s bottom line.
– Peter Jarich – head, GSMA Intelligence
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.
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