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DoT's subsidies to infrastructure providers for deploying renewable energy solutions will take care of capex. High-maintenance cost and deferred RoI might be dampeners
Heena Jhingan
Wednesday, February 03, 2010
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Going green has become a fancy term in the telecommunications alcoves. Both operators and infrastructure solutions companies have been making overwhelming commitments to adopt renewable energy resources, be it as a part of corporate social responsibility or a measure to reduce opex. The industry has been talking of innovations like tapping renewable energy reservoirs to meet power needs. Sadly, there is more green talk than some real action. A prime reason being the high cost of deployment of these energy sources and the long period to earn RoI.

Over the past few years, telecommunications has started to use renewable energy systems to power relay towers in remote areas. Some telecom service providers have started operating mobile repeater and relay stations, which harness solar and wind energy with the wind turbines foisted on the telecom towers.

The Universal Service Obligation Fund's fundamental agenda is to remove bottlenecks that hamper rural penetration. Thus, to overcome the power crisis, and solve huge investment issues, the department of telecommunications has decided to give subsidies to infrastructure companies, to deploy solutions based on renewable energy, and it will be awarding pilot projects early this year.

Infrastructure solution providers like GTL Infrastructure and Reliance Infratel are rolling up their sleeves to make the best of this opportunity. Tushar Kapadia, VP, strategic initiatives, GTL Infrastructure views this as a significant move on the part of DoT. He says, "I believe it is a great initiative from the licensor. At least now there is some sort of directive and the infrastructure solution providers can get some subsidy to come up with solutions that are based on renewable sources of energy."

"Financial viability was a big roadblock in the way of driving such initiatives. We have plans ready for the pilots. We have already submitted our expression of interest (EoI) to DoT, which they have approved in principle. We have planned pilots for two of the USO sites in Uttar Pradesh (East) and Andhra Pradesh," says Kapadia.

For Uttar Pradesh, the solution provider has a solar deployment planned. In Andhra Pradesh it will be looking at a hybrid solution.

GTL Pilot Snapshots

  • Pilots planned: 2 USO sites
  • Resources used: Solar and hybrid
  • One time investment : Rs 40-45 lakh per site for solar solution
  • Miscellaneous expenditure: Rs 4,000/month/site
  • Partner operators: Reliance Communications, Idea Cellular, and BSNL (in Uttar Pradesh, East)

The investment on the site will depend on the kind of power supply a BTS has. Ideally, for a solar solution a one time investments will be about Rs 40-45 lakh per site. Since USO Fund is committed to take care of three-fourth of the investments, it may not end-up to be a huge burden.

Solutions demand high maintenance. But there are other interesting models that can be worked out to handle the costs incurred on operating these solutions

Vikas Arya
director, National Networks O&M

Financial viability was a big roadblock in the way of driving such initiatives. We have plans ready for the pilots. We have already submitted our EoI to DoT

Tushar Kapadia
VP, strategic initiatives, GTL Infrastructure

"A matter of concern is the recurring maintenance cost that operators have to bear which comes to about Rs 4,000 per month, per site. The biggest concern is that operators may not be interested in sharing the maintenance cost and risk," Kapadia adds.

Vikas Arya, director, National Networks O&M, agrees with the fact that these solutions demand high maintenance. He says, "But there are other interesting models that can be worked out to handle the costs incurred on operating these solutions."

A large part of the country is power-starved, especially regions like North Uttar Pradesh, Bihar, Orissa, and even Rajasthan. Most of the USO sites are remotely located and may not necessarily be powered by a grid. The towers in urban areas may have access to grid power, but that does not mean that they are self-sufficient. Even in urban areas, the power supply is not uninterrupted and operators have to depend on DG sets to keep the BTS running.

Arya says power situations in Northeastern circles are really poor, the West is slightly better, but one cannot say that the power situation is any better in places like Gurgaon. Besides, it also depends on how government systems work in each of these areas.

GTL has conducted several independent pilots and has primarily found that as a construct model, such a solution is workable, but to develop a business model, financial aid is a must. The company has experimented independently on a site with an investment of Rs 10-12 lakh.

"We did not expect full autonomy of the pilot. But we saw interesting results. A conventional site would require about twelve to thirteen hours of back-up power. However, our set-up being powered by renewable energy brought that down to about ten hours." As the extent of autonomy increases, the initial investment will also go up. USO is looking at set-ups that are 90% autonomous, for that the investment has to be viable.

In other developing countries like Pakistan, USO Fund is being utilized for the green cause. Telenor Pakistan has already deployed solar powered base stations to beat the country's electricity scarcity, and has now signed a contract with Nokia Siemens Networks to build off-grid sites for rural areas. According to NSN, the solar powered sites will be implemented using Universal Services Fund (USF) that was awarded to Telenor Pakistan in 2009.

Curious Cases of Operators

  • Renewable Energy Powered Base Stations, Dialog Telekom, Sri Lanka In Sri Lanka, Dialog Telekom is piloting green power in collaboration with the GSMA Development Fund with ten hybrid renewable energy powered base stations across the country. The multi-vendor trial is enabling Dialog and GSMA to evaluate the effectiveness of different technologies.
  • Renewable Energy Powered Base Stations, Digicel, Vanuatu In Vanuatu, Digicel is working with the GSMA Development Fund to assess and develop commercial scale rollouts of green power. There are currently twenty-four live sites in the Digicel Vanuatu network running on green power, including eight mission critical backbone sites carrying up to 60% of Digicel's traffic. The findings of the initial assessment show that the commercial implementation of green power solutions is a viable replacement of diesel generators.
  • Renewable Energy Powered Base Stations, China Mobile, China China Mobile has one of the world's largest deployments of green technologies to power its base stations. Utilizing solar, wind, and bio-fuels as alternative energy sources, China Mobile had 2,135 base stations powered by alternative energy in 2008 across twenty-five of its provincial subsidiaries. Of these, 1,615 are powered by solar energy, 515 are powered by solar and wind energy and five are powered by alternative sources, including hydrogen.

Source: GSMA

To mitigate cost pressures and explore viability of solutions based on renewable energy, bodies such as GSMA have been lending a helping hand to operators and have some interesting success stories.

Heena Jhingan
heenaj@cybermedia.co.in

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