AISHWARYACompany ID [BOM:532975] Last trade:Rs.3.89 Trade time:1:15PM GMT+5:30 Value change:0.00 (0.00%)
AIRTELCompany ID [BOM:532454] Last trade:Rs.369.50 Trade time:9:24AM GMT+5:30 Value change:▼1.60 (-0.43%)
DHANUSCompany ID [BOM:532903] Last trade:Rs.0.12 Trade time:9:23AM GMT+5:30 Value change:0.00 (0.00%)
FINCABLESCompany ID [BOM:500144] Last trade:Rs.203.00 Trade time:9:24AM GMT+5:30 Value change:▲0.25 (0.12%)
GTLCompany ID [BOM:500160] Last trade:Rs.22.20 Trade time:9:20AM GMT+5:30 Value change:▲0.10 (0.45%)
GTLINFRACompany ID [BOM:532775] Last trade:Rs.2.90 Trade time:9:24AM GMT+5:30 Value change:▲0.08 (2.84%)
HCLTECHCompany ID [BOM:532281] Last trade:Rs.1,565.70 Trade time:9:24AM GMT+5:30 Value change:▲11.90 (0.77%)
HCL INFOCompany ID [BOM:500179] Last trade:Rs.83.00 Trade time:9:24AM GMT+5:30 Value change:▼1.00 (-1.19%)
HFCLCompany ID [BOM:500183] Last trade:Rs.14.12 Trade time:9:24AM GMT+5:30 Value change:▲0.13 (0.93%)
IDEACompany ID [BOM:532822] Last trade:Rs.157.05 Trade time:9:24AM GMT+5:30 Value change:▲0.65 (0.42%)
ITICompany ID [BOM:523610] Last trade:Rs.29.90 Trade time:9:24AM GMT+5:30 Value change:▼0.05 (-0.17%)
KAVERITELCompany ID [BOM:590041] Last trade:Rs.15.70 Trade time:3:27PM GMT+5:30 Value change:0.00 (0.00%)
MTNLCompany ID [NSE:MTNL] Last trade:Rs.30.50 Trade time:9:24AM GMT+5:30 Value change:▲0.15 (0.49%)
ONMOBILECompany ID [BOM:532944] Last trade:Rs.33.70 Trade time:9:24AM GMT+5:30 Value change:▲0.05 (0.15%)
RCOMCompany ID [BOM:532712] Last trade:Rs.123.60 Trade time:9:24AM GMT+5:30 Value change:▲0.60 (0.49%)
SHYAM TELCompany ID [BOM:517411] Last trade:Rs.29.50 Trade time:2:56PM GMT+5:30 Value change:0.00 (0.00%)
SPANCOCompany ID [BOM:508976] Last trade:Rs.6.50 Trade time:3:29PM GMT+5:30 Value change:0.00 (0.00%)
SPICE MOBILECompany ID [BOM:517214] Last trade:Rs.27.60 Trade time:3:40PM GMT+5:30 Value change:0.00 (0.00%)
TANLACompany ID [BOM:532790] Last trade:Rs.11.70 Trade time:9:24AM GMT+5:30 Value change:▲0.01 (0.09%)
TATA COMMCompany ID [BOM:500483] Last trade:Rs.360.85 Trade time:9:23AM GMT+5:30 Value change:▲0.75 (0.21%)
TTMLCompany ID [BOM:532371] Last trade:Rs.11.77 Trade time:9:25AM GMT+5:30 Value change:▲0.04 (0.34%)
TULIPCompany ID [BOM:532691] Last trade:Rs.1.60 Trade time:9:24AM GMT+5:30 Value change:▼0.03 (-1.84%)
VINDHYATCompany ID [BOM:517015] Last trade:Rs.424.00 Trade time:3:03PM GMT+5:30 Value change:▲1.00 (0.24%)
XLTELENECompany ID [BOM:532788] Last trade:Rs.3.30 Trade time:3:29PM GMT+5:30 Value change:▼0.06 (-1.79%)
Diesel Outlook: Operators look to cut consumption
Vikas Singhal, Head, Power and Fuels (India), ICF International
The non-availability of grid power has resulted in the excessive use of diesel for powering telecom tower sites in India. Currently, India has about 400,000 towers that consume about 3.42 billion litres of diesel annually. This is expected to increase to 7.6 billion litres per year by 2020 as operators expand their networks in rural areas, resulting in an increased demand for towers. Energy costs, including diesel costs, constitute 52 per cent of the opex for tower sites. Moreover, on account of high international crude oil prices, the rise in diesel prices is expected to lead to even higher costs. Given the low ARPUs, operators are looking to optimise their opex by reducing diesel consumption and shifting to renewable energy. The move is in line with the Department of Telecommunications’ (DoT) directive stating that at least 50 per cent of the towers in rural areas and 20 per cent in urban areas must use hybrid power solutions (renewable energy and grid power) by 2015.
The high demand for diesel in the country is expected to continue, driven primarily by the transport sector. According to the Twelfth Plan Working Group report, the demand in 2011-12 stood at 62 million tonnes (mt) and is expected to increase to 80 mt by 2016-17. The rise in demand will be supplemented by the planned capacity additions in domestic refineries, which will ensure adequate diesel supply. As per the 2011-12 annual report of the Ministry of Petroleum and Natural Gas (MoPNG), the current refining capacity in India is about 220 million tonnes per annum (mtpa) and is expected to reach 300 mtpa by 2017.
The price of international crude oil increased at a compound annual growth rate of 14 per cent between 2001-02 and 2011-12. Crude oil prices stood at $110 per barrel and have been volatile in the past few months owing to uncertainty over future demand. According to the IEA World Energy Outlook, crude oil prices will increase to over $120 per barrel by 2020. In line with this trend, diesel prices have also escalated globally to $90 per barrel, resulting in high domestic diesel prices. High taxes and duties in some states also result in higher diesel prices, ranging from Rs 40 to Rs 46 per litre.
Currently, 85 per cent of the crude oil processed by domestic refineries is imported. Consequently, high international crude oil prices substantially impact diesel prices in the domestic market. However, since the retail price of diesel is controlled by the government, the surge in diesel prices is not passed on to the end-consumer. The government has taken several measures such as the abolition of customs duty to keep prices within limits. The Petroleum Planning and Analysis Cell under the MoPNG has estimated that the actual price of diesel in Delhi stands at Rs 58.37 per litre while the retail selling price is Rs 41.32 per litre. This indicates a loss of Rs 17.05 per litre for oil marketing companies. Going forward, the government is expected to move away from the subsidy regime by allowing the sale of diesel at market prices and reducing the excise duty.
Managing energy costs
Deploying a diesel generator constitutes 15 per cent of the total capex in setting up a base transceiver station (BTS). Energy costs make up more than half of the opex required for maintaining a BTS. The operators recognise that diesel usage has led to a significant increase in costs. A cost analysis of two BTSs, one powered by diesel and the other by a combination of diesel and grid power, shows that the costs incurred in the first case exceed the costs in the latter by Rs 12,836 per month, assuming grid power supply of eight hours and the price of diesel at Rs 44 per litre.
In order to reduce their fuel expenses, operators have opted for sharing of telecom infrastructure, which will lead to lower capex for setting up new towers. However, the sharing model is expected to increase tenancies to 2.1-2.2 by 2016, resulting in greater consumption of diesel per tower.
DoT has prescribed new environmental norms that require operators to reduce carbon emissions and switch to energy efficient telecom towers. Carbon emissions from mobile networks need to be reduced by 5 per cent by 2012-13 and 17 per cent by 2018-19. Moreover, the cell sites in rural areas need to be powered by hybrid renewable energy sources such as solar, wind, fuel cells or a combination of these. In this regard, DoT has sought comments from stakeholders with regard to compliance with the new norms.
The Tower and Infrastructure Providers’ Association (TAIPA) has proposed the renewable service company (resco) model, under which renewable energy producers will provide green energy to tower companies to fulfil their emission reduction obligations. Moreover, operators are actively undertaking pilot tests with renewable energy solutions at sites with poor or low grid connectivity. TAIPA has also suggested sharing subsidy costs by paying a one-time fee of Rs 10 million to the government.Going forward, operators can adopt many site-specific technology solutions to manage their energy costs. Hybrid solutions such as solar panels and diesel generators, and natural gas-based generators and fuels cells can be deployed at cell sites in rural areas. Some of the energy efficiency measures are integrated cell site power management, deploying direct current diesel generators, and remote monitoring of generator run-time and fuel consumption to avoid fuel wastage. Moreover, operators can experiment with various models for reducing carbon emissions that can be financed by multilateral funding agencies in the US and Europe. Energy management services through a specialised independent solution provider can result in further cost savings
- Most Viewed
- Most Rated
- Most Shared
- Related Articles
- Diesel Gensets: Economics and Efficiency
- Telecom Energy Management: Need for a st...
- Resco Model: Collaborative approach to r...
- Fuel Concerns: Rising diesel prices add ...
- Grid Power: Key trends in availability a...
- Telecom Outreach: Key role of the USO Fu...
- Battery Back-Up: Powering the telecom se...
- Energy Saving Solutions: Innovative meas...
- Optimising Energy Use: Approaches and st...
- Need of the Hour: Green energy solutions...
No Most Rated articles exists!!