The Green Challenge for Telecoms: Stories from the front line in China
The Information and Communications Technology (ICT) sector directly accounts for between one and two percent of global energy consumption and emissions according to different estimates. This is comparable to the aviation sector. An insight report The Green Challenge for Telecoms is prepared by KPMG China, UK Trade & Investment and CEBEX Group, reporting on the status of responsible low energy design options for the communications sector.
To reduce emission and save energy, innovation in energy consumption efficiency has taken a number of forms in China, such as new carrier frequency technologies, distributed antenna (multiple output) systems and base stations that are being co-built or co-owned. Base stations are a key part of the investment and the focal point for achieving greater efficiency. As shown in the figure below, base stations account for more than half of the overall cellular network power consumption. Telecoms operators around the world are embracing total cost of ownership approaches to justify their investments in networks and China is no different. The decision to invest afresh in more efficient power systems and base station technologies can yield many benefits that can be factored into the total cost, such as reduced input power and higher power density. "Energy efficiency gains over the past decade, while substantial, have not been able to keep pace with an exponential rise in data traffic," says Leah Jin, head of KPMG China's climate change and sustainability advisory services, "so reducing energy costs is key to operators being profitable."
Source: Green Radio, Vodafone
Collaboration between vendors and operators has been a key to improve efficiency. The sustainability agenda has been a catalyst for new forms of collaboration between operators and vendors, and in many cases between different operators. However, collaboration may not yet be so pervasive at every point on the value chain. "Innovation needs to be accelerated and become more consumer driven," commented Ning Wright, Partner in charge of Information, Communications & Entertainment at KPMG China, "It may not be possible to accept that energy reduction comes at the expense of performance or cost to the end user. But the consolation is that energy efficiency can often mean tangible consumer benefits - for example in longer battery life for devices." Lower power consumption requires collaboration across the value chain and vendors need to get closer to understanding the needs of consumers and recognising that innovation must be consumer driven.
It is important to have globally consistent indicators and global targets in terms of energy conservation and emission reduction in the information communication industry. Standardisation makes it possible to measure real energy impact in terms of both embedded energy along the value chain and direct consumed energy. But so far, the policy of each market is driven by regional and domestic agendas. The persistent uncertainty will hinder both the efforts of businesses to further adopt low energy ICT measures and for local legislative bodies to push forward incentives and regulations.
The increasing focus on energy conservation and emission reduction has made smart grid a much-discussed new issue. The implications for telecoms are twofold. The deployment of a smart grid will create many business opportunities for telecoms as it involves the informatisation of electricity markets and potentially other energy forms. The telecoms sector is a key enabler as there is a need for greater networking between different points on the energy supply chain. A second point is that the sector could benefit as an energy consumer, and even resupplying power to the grid in some cases. If there is an opportunity to sell power back to the grid, this can accelerate the return on investment or improve the business case for new investment.
Generally speaking, while there is a good deal of optimism around the potential to bring low energy solutions to the industry, there is more to be done to bring everyone on board to realise what are the benefits and what is possible. "More exploration and innovation require the involvement of diverse communities and stakeholders of organisations to develop a common view of sustainability and low energy design, so as to ensure that we can make big advances to meet our future challenges," Ms. Jin added.
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