Onsite solar and energy storage to ring the bell of telecom companies

Substantial cost savings achievable and a USD 100 billion+ investment opportunity for onsite renewables

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.

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.

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.

Experts estimate that globally there are more than 3 million telecom towers. 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 is estimated at far beyond USD100 billion.

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.

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.

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Hillig founded THEnergy in 2013. THEnergy is a specialized business consultancy that focuses on innovation in the energy sector, such as microgrids, solar-diesel hybrid, energy storage and hydrogen. THEnergy has developed sophisticated tools to support its clients in product launches and growth strategies. During the last six years, THEnergy has consulted leading multinational utilities, oil and gas companies, and start-ups regarding energy strategy, due diligence, market intelligence, and communication. THEnergy combines Hillig’s previous experiences working at Alstom Power in conventional energy generation and at Innotech Solar. At the beginning of his career, Hillig consulted leading companies from the transport, telecommunication and construction sectors.

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