In September 2020 at GSMA Thrive Africa, the GSMA CleanTech programme published a report on renewable energy – ‘Renewable Energy for Mobile Towers’. This short video summarises the key trends highlighted in the report.
As the industry implements strategies to achieve net zero greenhouse gas emissions by 2050 in line with the Paris Agreement, it is critical to accelerate the transition to more green and sustainable forms of energy production. To support this global effort, the GSMA CleanTech programme conducted this landscaping study to better understand the scale of the challenge in converting diesel-powered mobile towers with bad-grid connections and off-grid mobile towers to renewable energy solutions.
The study reviewed the industry and energy portfolios of 91 low- and middle-income countries (LMICs) spanning across Asia, Africa and LATAM regions. Through this process seven countries – Bangladesh, Democratic Republic of the Congo, Fiji, Mali, Myanmar, Peru and Uganda – were identified as ‘representative’ countries for an in-depth stakeholder study. Using insights from stakeholder interviews, key trends and opportunities to switch off-grid and bad-grid sites to renewable energy sources were mapped out.
The size of the problem
Our research estimated that in Q1 2020, 88 per cent of off-grid and bad-grid tower sites still ran on diesel energy, resulting in an estimated seven million tonnes of CO2 emission per annum.
Although the total proportion of off-grid sites has reduced since 2014, owing to both the industry efforts to adopt cleaner energy practices and the growth of the national grid in Asia, the study highlighted that there’s a substantial opportunity to address key barriers in transitioning off-grid and bad-grid locations to renewable solutions.
Key trends and opportunities
Trends seen in the mobile tower management ecosystem:
- The tower-sharing model has transformed tower ownership and how renewable energy business models are assessed and evaluated.
Almost 70 per cent of global towers are owned by TowerCos. Mobile network operators (MNOs) and TowerCos assess the business case for tower energy management quite differently.
- Energy service companies (ESCOs) have an important role to play in the industry’s progression towards renewable energy.
However, the model of how an ESCO could manage mobile tower energy supplies has not yet been demonstrated at scale. There is an opportunity for ESCOs to standardise their pricing models and work towards win-win business models with MNOs or TowerCos.
- Small cell sites and Anchor-Business-Community (ABC) mini-grid models have the potential to bring connectivity and electrification to rural areas.
The ABC mini-grid model using MNO towers as the anchor customer, was previously considered to have a high potential to drive adoption of renewable energy in the industry. However, the model hasn’t scaled over recent years and has encountered multiple barriers for adoption. (These have also been documented by GSMA M4D Utilities programme.) Small cell sites fully powered by renewable sources have been set up on a Network as a Service (NaaS) model. This approach, as seen in the example of Africa Mobile Networks, may have potential to scale.
Trends that’s linked to MNO and TowerCO operations:
- Available capital expenditure (CapEx) for renewables competes with network expansion and upgrade priorities.
The limited MNO CapEx available is stretched between expansion and upgrade of their network. As a result, they have limited CapEx available for renewable energy.
- Improved access to electricity from national grids is disincentivising investments in renewable energy, but net metering may reverse this.
National grids have grown significantly over the last five years, especially in Asia. This has helped to reduce the total number of off-grid sites. Further grid expansion could be a strong opportunity if the growth of the grid is transparent and if some of the on-grid renewable policies are strongly enacted.
- Many LMICs need enabling telecom and energy sector policies and regulatory frameworks that incentivise renewable energy.
A supportive telecom and energy policy environment would help MNOs and TowerCos to switch more towers to renewable energy. There is a significant opportunity to engage with energy and telecom authorities to work towards an enabling policy environment.
The GSMA CleanTech report, explores how these trends affect the seven lighthouse countries, which in large part are representative of the sub-regions they are based in. While the process of converting to renewable energy is a challenge, we believe it can be achieved with a multi-stakeholder, participative and inclusive process.