Telecommunications companies are essential—allowing people to easily communicate worldwide. As an essential service, telecommunications firms facilitate greater social connections and fuel global business.
However, it’s not all good news. Telecoms use large amounts of electricity to deliver services: the industry’s high carbon emissions contribute directly to climate change. Knowing this, many players in the sector are taking steps to source renewable energy for their operations.
In this article, we take a closer look at the telecoms sector. We review the challenges it faces and how companies can become green telecoms and play a leading role in the fight against climate change.
Telecom Energy Use: The Status Quo
The telecom sector consumes an estimated 2-3 percent of global energy currently. For context, emissions from the telecom sector are comparable to the entire aviation sector.
With such significant emissions output, you would expect that there would be greater pressure on the telecoms sector to reduce emissions. However, because telecoms are vital to reducing carbon emissions in other sectors, telecoms don't receive the same level of climate scrutiny.
Technological advances in digitisation and the Internet of Things (IoT) are driving this impact. By increasing visibility into energy usage, IoT connected power grids, smart houses, and smart transport - telecoms allow us to become more energy efficient.
Carbon Trust and the GSMA research conducted in 2019 concluded that the telecom sector “enables carbon reductions in other sectors that are 10 times larger, equivalent to approximately 4 percent of global emissions”.
Transition to Green: The Challenges
The telecom sector will be key to our collective response to climate change. However, the switch to green telecoms will create challenges for companies. Here are the two biggest challenges companies will face.
Modernising infrastructure for energy efficiency
Energy is often one of the highest operational costs for telecom companies, ranging from 20 - 40 percent of network OPEX according to the GSMA. Reducing energy usage in telecoms is a win for both business and climate.
For existing telco infrastructure, new technologies— incorporating Artificial Intelligence (AI) or using heat energy recovery for infrastructure—can increase energy efficiency. This will help reduce OPEX and carbon emissions. McKinsey suggests that telecom operators could reduce energy costs by at least 15 to 20 percent in the space of just one year.
Decarbonising in the 5G era
The rollout of 5G infrastructure is accelerating worldwide. While security concerns may have dominated headlines, energy consumption is also a critical consideration in the 5G infrastructure rollout. The good news is that 5G technology is more energy-efficient than 4G networks. According to Nokia and Telefónica, 5G could be “up to 90 percent more energy efficient per traffic unit than legacy 4G networks”.
The concern for the telecom industry, however, is the effect of increases in traffic and network use. With many more applications for 5G technology, energy consumption would increase significantly. This would negate efficiency savings over 4G technology. The industry trade body, GSMA, has highlighted that “the potential increase in data traffic (up to 1000 times) and the infrastructure to cope with it in the 5G era could make 5G, arguably, consume up to 2-3 times as much energy”.
With such large increases in energy use, the telecom industry could struggle to meet climate commitments. Telecom companies will need to plan now to ensure they don't become part of the climate change problem, rather than the solution.
Transition to Green: The Solutions
Many green telecom companies have already recognised this challenge. Their strategy? To set emissions targets under the most acknowledged sustainability frameworks. According to the latest annual report by GSMA, “mobile operators covering 50 percent of global mobile connections and 65 percent of industry revenues have now committed to science-based targets”. They also state that “36 percent of the mobile industry by revenue have credibly committed to net zero emissions by 2050 or earlier”.
Towards Green Electricity Sourcing
Because emissions related to purchased electricity (Scope 2 emissions) represent a substantial part of overall emissions of a telco, clean energy purchasing is critical to science-based and high-achieving decarbonisation strategies. The industry has many options available to make the switch to clean energy. These include:
- Purchasing green power through Energy Attribute Certificates - GOs, RECs, I-RECs, TIGRs, etc.
- Contracting Power Purchase Agreements (PPAs) and/or green tariffs
- Installing on-site renewable generation.
For further insight to these options, please review our deep dive on renewable energy procurement.
These renewable energy products and purchases will make the most impact only if they recognise the physical reality of energy grid emissions.
High-impact solutions that enable telecoms to shift towards clean energy procurement strategies are already available. FlexiDAO's software solutions and advisory services can help all kinds of clean electricity consumers at all stages of their renewable energy journey. We advance renewable procurement practices with data-driven intelligence.
How? In the past, our telecom clients invested more than 100 hours per year manually obtaining their electricity data, processing it, and getting auditor approval. This process included interacting with their local energy supplier to get confirmation of the volume and type of energy certificates that were cancelled. Now multiply this by the more than 10,000 energy consumption sites (e.g. antennas) that many telecoms use. This makes data collection especially time-consuming and error prone.
FlexiDAO’s software gathers all of the energy usage data and certificates and stores them on one single dashboard, along with location-based and market-based emissions data. This eases the data collection process and saves time on Scope 2 reporting. It can be a smart first step towards sourcing renewable energy around-the-clock, 24/7. After all, you can’t manage what you don't measure.
Becoming true energy leaders - 24/7 carbon-free communication
Current official schemes that certify the aforementioned renewable products and purchases have been vastly successful in propagating renewable energy procurement in the private sector, however they do not ensure a real decarbonisation of the electricity that telecom companies consume. This is due to the poor visibility on the time in which the energy represented by the certificate was generated. To take an example, antennas will consume energy day and night, but a telecom firm that buys its renewable energy uniquely through solar energy certificates is entitled to claim to be 100 percent renewable.
For true energy transition leaders, the final goal is to certify energy procurement data on an hourly basis, 24/7, ensuring accurate and credible sustainability reporting. At FlexiDAO, we can measure historical gaps between hourly carbon-free energy production and your hourly electricity consumption to progress towards a 24/7 zero-carbon strategy. This will ensure that your company is making the highest contribution possible to climate action. It will enable confident climate communication which will position you amongst the climate leaders in the telecom industry.
Opportunity for Telcos to take centre stage in climate action
The telecom sector is in a unique position to fight climate change. It will enable digitisation which will reduce emissions in other sectors. Green telecom companies that make the switch to cleaner energy, can make an impact by providing carbon-free communication and networking for customers.
As networking and communication advance with the rollout of 5G technology, the prospect of 24/7 carbon-free electricity also becomes achievable. This concept is the most advanced form of renewable energy procurement. It has been adopted as a core renewable purchasing strategy by companies such as Microsoft, Mercedes-Benz, and Google.
If you would like to know more about how we can help your company transition to green telecoms and achieve 24/7 carbon-free communication, please get in touch with the details below and sign up for our newsletter.