Current and Future Trends of Renewable Energy in the Telecommunications Sector

Ravi Krishnaswamy Vice President Energy Practice Frost & Sullivan

May 2012

Agenda
Global Mega Trends Convergence of Industries Energy and Telecom Telecom Power Consumption Current Status Renewable Energy Technology Trends Key Restraints and Drivers for Adoption of Renewable in Telecom Regional Analysis Europe, Asia Pacific Case Study: India The Road Ahead

Global Mega Trends

Impact of Mega Trends on Key Organizational Functions

Marketing

Mega Trends are global, sustained and macroeconomic forces of development that impact business, economy, society, cultures and personal lives, thereby defining our future world and its increasing pace of change

Innovation Scouting

R&D Budget Spending

Technology Planning

Product Planning & Development

Top Global Mega Trends

Urbanization

E-Mobility

Smart Green

is

the

New

New Business Models

Innovating to Zero

Infrastructure

Health, Wellness and Ageing

Social Trends

Convergence, Name of the Game

Energy & Power Industry

T&D Technology Power Electronics Renewable Energy Integrated Distribution Management Substation Automation AMI-Enabled Metering

Telecom and Energy Sectors are a perfect match for sustainable growth

Information and Communication Industry IP Networks

Digital Technology Analysis Software Wireless Communication Technology Integration Network Security

Building

Automation Demand-Side Management Connectivity of devices Monitoring and Sensing Smart Grid Integration

Automation & Building Technology Industry

Source: Frost & Sullivan.

Top 10 Energy Technologies to Watch for in 2020

Annual Power and Energy Outlook: Top 10 Technologies through 2020

Energy Storage Waste-to-energy Smart Grid & Super Grid

Wind Energy

Top 10 Technologies of the Future

Following are key technology platforms that are poised to have a profound impact on a number of sectors across the globe. These areas present a potential high ROI.

Bioenergy

Unconventional Gas

Hydrogen & Fuel Cells

Energy Management Solar

Clean Coal Technologies

Renewable Energy consumption by 2020

350.0

Clean Energy Consumption by Region

Asia Pacific

300.0

250.0

Europe
200.0 MTOE 150.0

NA

100.0

50.0

Africa LA ME

0.0 1990 1995 2000 2005 2010 2015 2020 2025 2030

Source: BP Statistical Review of World Energy

7

Mobile Telecom Network: An Introduction

Who uses the power

Annual Telecom Energy Consumption is 4% of the global energy consumption Is equivalent to 250 m tons of CO2 Which is equivalent to 50 million automobiles!! Clearly the onus is on the Power Consumption: Fixed Line operator
10 30

70
Operator OPEX Consumer Operator OPEX

90
Consumer

Power Consumption: Mobile Network

Technologies and Power Consumption

Source: IEEE Paper

10

Power Consumption: Mobile Network Where?

Issues with current power source

Base Station Volatile Oil Prices Maintenance Costs Logistical Costs Practical Issues: Theft, Contamination Mobile N/w

Data Centers & Others

Cooling, System

Power among top 3 OPEX items for most telecom operators

11

Current Power Supply Sources

Fossil fuel

Grid Power

Renewable Energy

Satellites is the only part of the telecom value chain using completely green energy!
12

Why the urgency to move to a sustainable source?

Mobile data traffic to increase twelve fold in India by 2020 this means more GHG emissions unless it is powered by renewable

Snapshot India

13

Mobile Internet Explosive Growth

Sustainable Business for Telcos, Unsustainable for Environment!!

14

Renewable Energy in Telecom What are the options?

Solar Energy Wind Energy Fuel Cells Hybrid Systems Biodiesel Biomass Biogas Geothermal Mini Hydro
Community, Grid Integrated or Off grid applications Off Grid Stand alone applications

Smart Energy- Energy Efficiency, Free Cooling etc.

15

Renewable Energy technologies are reaching a maturity stage

Technology Development Stage Applied R&D Tech. Demonstration

Tech./Product Development

Tech./Product Technology/ Maturity Product Decline

Biomass Power Geothermal Power

Market Size

Wind Power

Solar Power

Marine Power

Time
Source: Frost & Sullivan

Note: This is an indicative graphical depiction of the various renewable energy technologies and their maturity stage.

16

Solar Technologies
Photo voltaic is the most suited and fast adopted technology for telecom sector

First Generation PV Cells

Concentrator PV

CSP Technology

Linear Fresnel systems Power tower Dish concentrators

PV Technology

Parabolic trough

First generation PV cells (monocrystalline silicon, polyor multicrystalline silicon, ribbon silicon) Second generation PV cells (amorphous silicon, hybrid cells, cadmium telluride, copper indium diselenide) Third generation PV cells (organic solar cells, polymer hybrid solar cells, polymer solar cells, nanocrystalline cells, and dye-sensitized solar cells) Concentrator PV

Source: Frost & Sullivan analysis.

N927-14

17

Solar Cumulative Installed Capacity Forecast by Region

200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

.80 80 .70 70 .60 60 .50 50 .40 40 .30 30 .20 20 .10 10 0.0 0

North America Asia-Pacific Asia Pacific

Year

Europe Rest of World Rest-of-World

Cumulative Installed Capacity Growth Rate (%)

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.

The global PV market is expected to continue to grow at a CAGR of 25.0 percent from 2010 to 2017, reaching 188,461MW in 2017. PV solar installation growth rate is likely to decrease in Europe in the short term due to lower deployment of PV panels in Spain and Germany, the two main markets for solar power in Europe.

N927-14

Cumulative Installed Capacity Growth Rate (%)

Cumulative Installed Capacity (MW)

18

Solar Price Analysis

A decline in solar module installation cost augurs well for remote telecom applications

5.0 Growth Rate (%) 0.0 (5.0) (10.0) (15.0) (20.0) (25.0) Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.

It is anticipated that solar module prices will continue to decline at a lower rate during the forecast period due to economies of scale and technological improvements, making solar energy more affordable. Module prices are likely to decline at a CAGR of 9.7 percent from 2010 to 2017.

19

Wind Energy
Among the entire gamut of renewables, wind energy is the most mature of them all. Wind energy dates back several centuries unlike the other renewables such as solar, biomass and geothermal which have evolved only in the past few decades. Apart from the environmental benefits, wind energy also benefits the rural population by providing an additional source of income to farmers who installed such electricity generating devices on their farms.

Types of Wind Turbines Roof Mounted Horizontal Axis Vertical Axis

Roof Mounted

Horizontal

Vertical

20

Global Wind Capacity Forecasts

21

Onshore Small Wind Turbine Installed Capacity in Asia Telecom is part of this application
Installed Capacity (kW) Installed Capacity Growth Rate (%)

16,000.0 Installed Capacity (kW)

20.0

12,000.0

15.0

8,000.0

10.0

4,000.0

5.0

0.0
Annual Additional Capacity (kW) Total Installed Capacity (kW) Installed Capacity Growth Rate (%)

2006 380.5

2007 431.0

2008 496.0

2009 624.5

2010 791.0

2011 965.0

2012

2013

2014

2015 1,490.2

2016 1,674.6

0.0

1,077.2 1,196.8 1,338.0

3,103.5 3,534.5 4,005.5 4,630.0 --13.9 13.3 15.6

5,421.0 6,386.0 7,463.2 8,660.0 9,998.0 11,488.2 13,162.8 17.1 17.8 16.9 16.0 15.5 14.9 14.6

CAGR (2009-2016): 16.1%

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

Installed Capacity Growth Rate (%)

22

Biomass Can it be used for Telecom?

Biomass consists of plant and plant-derived material. Typical sources of biomass include agricultural residues such as rice hulls, straw, bagasse from sugarcane, wood chips and coconut shells and energy crops such as sugarcane or switchgrass. Originally biomass was used directly for energy production but technology improvements have resulted in an alternate pathway for processing into fuels. Examples of biomass fuels include liquid and gel fuels including oil and alcohol and pelletized biomass for gasification and combustion.

Biomass Feedstock For Energy Production

Wood
Wood Wood Waste Sawdust Wood Scrap Black Liquor Switch Grass Willow

Waste
Agricultural Residue Municipal Waste Manufacturing Process Waste

Alcohol Fuels
Corn Sugar

23

What is Impeding Adoption of Renewable in Telecom Key Restraints

Very High CAPEX

Locational restraints

Space Requirements

Need for backup energy storage

Limited Limited awareness Awareness

24

Key Drivers for Adoption of Renewable in Telecom

Carbon Credit Benefits

Low maintenance Reliable Energy

Branding Regulatory Requirements Low OPEX

No dependency

25

Renewable Adoption in Telecom Europe leads the Way

European Unions WEEE Directive British Telecom sources all its requirement from renewable in UK Telefonica Germanys GSMA Project estimated 1.8 m savings Interxion Belgium opts for 100% green energy Flexenclosures E-Site can save 90% diesel savings

26

Renewable Adoption in Asia Pacific

-BT & Vodafone set 50% Energy Reduction Goals -Nortel & Huawei active on Green Initiative

-Globe Telecom Goes green with US$700m investment in Network Moderinzation -Estimates 60% OPEX savings

Hutchison Telecom deploys Fuel cells in Indonesia

-Govt. issues green Directives for Telecom -Bharti Telecom & Tata Communications Forerunners on Green Telecom

-Govt. set targets to reduce CO2 to half -Green Telecom Research Center with Bell Labs
27

India: Renewable Telecom Initiatives

400K mobile towers - 70% in Rural & Semi Urban - 60% Energy reqmt by Fossil Fuel - 1.8b Litres of Diesel used - Exploit Govt. subsidies causing loss of Rs.26000m - Emits 13m tonnes CO2 Regulations Solar Energy: - National Annual Average 5KWh/sqm - 2300-3200 sunshine hours a year - 1KW Solar Photovoltaic generates 3.54.5 KWhr per day. Wind Energy: - National average wind speed 5-6m/s - 5th Largest Wind Energy Producer - Minimum required for generation 4.5m/s - 1KW Wind Turbine generates 3KWhr per day. Result
Expedited Energy Conversion process E.g. Tata Comm acquired stake in Green Energy Co. Converted more than 30% Energy in Chennai to Renewable Saved Rs.110m OPEX By 2015, 50% Towers & 20% Urban on Hybrid Energy By 2020, 75% Towers & 33% Urban on Hybrid Energy Universal Services Obligation Fund to support CAPEX

Challenges
Rural Electrification Unreliable Power High OPEX Unsatisfatory Service

28

Case Study: Bharti InfraTel

Indias Largest and Worlds Fifth Telecom Tower Infrastructure providers Owns 33000 of Indias 400,000 towers 9000 off-grid Rural Towers(18% of total off-grid in India) 1350 Sites on Solar Hybrid

Facts

Initiative

Green Towers P7 Initiative (Aim reduce diesel usage & carbon emissions) Scope to cover 70% of its towers

Savings

Estimated to Reduce Diesel Consumption by 58.17 m litres per year CO2 by 154000 tonnes per year Operating Cost by 25% at individual sites

29

Way Forward Telecom Power Systems can be integrated into a microgrid architecture
Power Source Automation Transmission and Distribution Automation

Distributed Generation (DG)

Diesel/Gas Biomass Solar Wind

Microgrid Control Center

Energy Management Systems

Switch

Demand Response

Energy Storage
Lead Acid Batteries Flywheels Fuel cells or Flow batteries Sodium Sulfur and etc
Source: Frost & Sullivan analysis. 30

Electricity Loads
Main Grid

Emerging Trends of Green Technologies in Telecom

Green Touch: International Consortium which includes Bell Labs, WSL, Freescale Semiconductors etc. Target to increase Network Efficiency by 1000 times

Renewable Energy with Lithium Ion Batteries forms the basis for power supply Integrated with a wider smart grid or micro grid Switching elements off during low demand situations Optical bypass could save 45% energy

Helps reduce noise and emission levels Better energy security

Source: Frost & Sullivan analysis. 31

Thank You Q&A

Ravi Krishnaswamy kravi@frost.com

32