Tower firms go solar to save on diesel & soot

Cell phone towers would soon be running on solar energy, if the ministries of renewable energy and telecommunications have their way. The two ministries recently announced plans to get telecom tower operators to use solar power to operate their towers.

India currently has more than 250,000 cell phone towers, which consume about 2 billion litres of diesel per year. Each tower consumes an average 5 kilowatts of power and the consumption increases with the number of telecom operators using the tower.
The move from diesel to solar and other alternate sources of energy will result in a reduction of 5 million tons of CO2 emissions as well as a savings of $1.4 billion in operating expenses (opex) for telecom tower companies.

“Tower costs comprise 30% of opex for a company. It makes sense especially in rural and semi-urban areas where electricity supply is not reliable. Even if they save 5% of opex, that’s huge,” said Romal Shetty, a telecom sector expert at KPMG India.

GTL Infra, a subsidiary of Mumbai-based Global Group, which has 32,500 towers, has already started moving from diesel to solar and other alternate sources of energy.

“Yes there is a message in that regard. We have completed solar-enablement of about 5,000 of our towers in the last 2-3 months. Others will also happen. Ultimately, the aim is to move about 75% of our towers on solar energy, especially the ground base stations. We have already placed the purchase order for solar panels,” said Charudatta Naik, an executive director at GTL Infra.

The largest tower firm in India is Indus Towers, a joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular, which has a little over 100,000 towers. Reliance Infratel has around 50,000, and Bharti Infratel has 30,000 towers.

Incidentally Airtel used to be the second-largest buyer of diesel after Indian Railways till 2007.

“Bharti used to be the second-largest buyer of diesel in India till 2007 (Indian Railways is the number one buyer), when it spun off its cellular towers into a separate entity —- Indus Towers. Bharti did not want to be worried about owning diesel towers anymore. This allowed Bharti to not only better predict and control costs, but also focus its energies on marketing, new business development and service innovation,” Ranjay Gulati, the Jaime and Josefina Chua Tiampo Professor of Business Administration at the Harvard Business School had told DNA in an earlier interview.

Bharti Airtel has already started a pilot project to evaluate the savings by moving from diesel to solar-based energy source.
“We have been asked to provide solar panels for 20 Airtel towers initially as a pilot project. Once they are convinced of savings, we will be getting orders for 100 towers from Airtel,” said a source in Delhi-based Acme Tele, which provides alternate energy resources to telecom firms.

“The Zain deal is also going to open new opportunities for us in Africa where we are present in 20 countries. Continuous electricity availability is an issue in many parts of Africa. Moreover, Airtel will look to curtail costs there,” the source said.

GTL Infra and Acme Tele have adopted the strategy of making the investment and then realising it from clients.

GTL Infra, for one, is investing Rs 2,400 crore in the energy management services business and expects a revenue of Rs 2,500 crore from it in three years.

“These projects are mostly for places where the electric supply is not reliable. So once we get the order for 1,000 sites, we shall be investing in the infrastructure and Airtel would pay us based on the annual savings of electricity we provide them,” the source from Acme Tele said.

The companies are hoping the government will soon disburse the subsidy of 50% on solar panels as announced in the Union budget. “Each solar panel costs about Rs 28 lakh. If the government gives the subsidies sooner, we would be able to roll out faster. However, we hear that from April 1, 30% of subsidy will be disbursed,” said Naik of GTL Infra.

 “We are going to generate within the first three years 1,300 mw of solar energy with 1,100 grid-connected and 200 non-grid connected (plants). By 2022, we should have 20,000 mw of solar power,” Union minister for new and renewable energy Farooq Abdullah said recently.