Environmental issues in telecoms

Environmental issues in telecoms

It's easy to talk about being green, but what does it mean in practice? Are environmental issues really motivating developments in the telecoms industry, or are they just a topical and effective way to reduce expenditure? Angela Partington explores.



When it comes to environmental issues, the position of the telecommunications industry could perhaps best be described as one of balance, and of a rather severe pragmatism. The industry can, of course, make a number of strong arguments to promote its green credentials.

The very existence of telecommunications, with the rapid growth and development in technology that we have seen in recent years, has had beneficial impacts. Telepresence and the adoption of unified communications are slowly replacing the need for global travel, as demonstrated by the recent plans of Antonio Horta-Osorio, the new chief executive of Lloyds Banking Group, who has banned employees from travelling for a week every month for the rest of the year, expecting them instead to make more use of video conferencing. Virtualisation and cloud computing are much more environmentally friendly than the alternatives.

Nevertheless, environmental issues are playing a massive role in wholesale telecoms. For Barry Kingsland, director for energy and sustainability at Cable&Wireless Worldwide, green issues are driving significant developments in global energy markets, and in turn within the telecoms sector: “The whole smart utilities agenda is ramping up massively, driven by carbon reduction commitments. There’s an expectation that the industry will spend something like £200 billion over 10 years, in fundamentally changing the way the energy sector works.”

The true cost of energy

At present, according to research by Emerson Electric, the telecoms industry alone is estimated to use 164 terawatt hours per year, making it responsible for 1% of all global power consumption. It is also responsible for generating 110.7 million tons of CO2, equivalent to the emissions of 29 million cars.

Everything in telecoms uses power, from the major power plants and cooling systems harnessed by the biggest data centres, down to the embedded power suppliers required by servers. And, as everyone knows, the price of energy is rising, creating a strong financial impetus for telcos to reduce their total power usage.

Dave Wardell, global head of sales for network implementation at Nokia Siemens Networks, says: “When we started the energy solutions business, cost was the key driver, and it still is. Everywhere, fuel and energy prices are rising, and it’s impossible to mitigate that. When you combine the fact that energy prices are rising with the fact that the costs of renewable technologies are falling, the case for development is growing very fast. If the business case looks OK today, next year it will look great.”

Yet, as so often is the case, it is difficult to generalise about the benefits being experienced. There are clear differentiators between the energy costs incurred by telcos in mature markets and those in developing markets. Wardell highlights the different costs of energy consumption as a proportion of total network opex between the two markets: research shows that up to 10% of network opex is used on energy in developed markets, while in developing markets that figure can exceed 30% of network expenditure. Perhaps even more eye opening is the fact that Nokia Siemens Networks estimates that potentially 86% of a mobile operator’s energy consumption occurs in the network infrastructure.

Environmental standards

Clearly, expenditure is playing a significant role in the approach telcos are taking to green issues, but are there other drivers? The level of expectation placed upon wholesale carriers to comply with environmental working practices does vary, but it is definitely a factor. Kingsland refers to this as “the whole social thing”, and explains: “There’s an expectation within our customer base. Customers have got their own expectations, and are committing to carbon reductions, and in turn they expect a very explicit commitment in our contracts these days.”

Environmental objectives and legislative requirements are certainly placed upon telcos, although these can vary significantly between regions. Kingsland says, “On every contract from the government, there are specific requirements around improving performance and sustainability and specific targets on carbon and water consumption. In a recent government contract we won, there was something like a 16% weighting on sustainability factors in the bid.” Kingsland also refers to the waste electronic and electrical equipment (WEEE) directive, which governs the way all European businesses dispose of electrical equipment at the end of life, as well as other regulations controlling oil storage, protection and recovery.

Perhaps the most commonly referenced standard is ISO 14001 environmental accreditation, which is designed to help businesses in any sector be more environmentally friendly, with standards designed to reduce their environmental impact and enhance their environmental credentials. It is available both on a national and a global basis, but there are some regional variations which certainly impact the way businesses operate.

Water standards and pollutant controls can vary widely, as can gas standards for things like fire protection – halon gas, for example, has been completely phased out in Europe but is still acceptable in Asia. Energy standards and requirements are also different, with variations in the existence or not of carbon reduction commitments and requirements relating to renewable energy sources.

Cable&Wireless Worldwide achieved UK accreditation for ISO 14001 this year, and is currently focussed on securing accreditation for the global ISO 14001 scheme. Kingsland’s comments on the benefits which the business has achieved from this process make interesting reading: “One of the things that’s come out of ISO 14001 is that it drives a consistency of process in your business. Because you have consistency of process, you do things in a very repetitious way. You can then fine tune your operational processes. That takes costs down and you have less wasted time in your business.”

Business drivers

However, even in regions which do not set challenging environmental regulations, telcos can still find themselves establishing their own minimum standards for system efficiency and minimising their carbon footprint, in an attempt to avoid heavier regulation.

David Gerhart, business development and planning, energy systems at Emerson Network Power, highlights Verizon’s approach as a case in point. “The US is a light regulatory area. Verizon likes that idea and generally tries to be pre-emptive, making sure that they’re being good corporate citizens so that they don’t have requirements mandated upon them.” As a result, Verizon has established minimum levels of efficiency which govern all their relationships with suppliers.

To Gerhart, leaving these issues to market forces is the ideal solution. “Generally, engineers are ahead of the regulators. We have a lot of solutions in development that can help operators with their energy reduction plans. We just need the ability and the interest from the providers to fund it.”

Not all carriers have focussed their energies on environmental issues, however; nor should this be a surprising situation. In an industry which has experienced periods of substantial growth and development over the last decade, Gerhart points out that for many carriers, their focus has been elsewhere: “Most of the energy for the telecoms service provider has been focussed on building out networks, or moving from 2G to 3G and LTE. Their focus has been on providing coverage and providing services. Traditionally, over the last decade there has been very little attention paid to doing things more efficiently, in terms of the performance of equipment.”

This has led to the current scenario, Gerhart believes: “Their terms of efficiency have been measured by how to build their network fast, where they could make it reliable and expand it easily. They woke up on the other side of that equation with a tremendous amount of operational cost associated with the network that they have built out.” He believes that some of the difficulties are due to the separation in responsibility for capital expenditure and operational expenditure within the industry. He also believes that the tension between the two parties responsible for capex and opex can bring some successes for carriers trying to meet very aggressive targets on both fronts. However, he highlights a danger that this division can lead to short-term purchasing decisions by carriers.

A broader perspective

This is perhaps starting to change as companies move towards taking a more holistic approach towards capital expenditure and operational expenditure, enabling telcos to find new ways to reduce and manage their costs, with environmental benefits consequent to reducing the need for energy usage. “One of the innovations in our industry,” says Gerhart, “is the advent of the next-generation of technology in energy efficiency and power conversion efficiency.” Carriers are becoming more willing to invest more in infrastructure or hardware if it might generate significant reductions in expenditure due to increased efficiencies.

One of the issues which still needs to be tackled, however, is the timeframe within which a financial return on any environmental improvements are considered acceptable. Nokia Siemens Network’s Wardell is very familiar with the tensions this causes: “In the energy sector, you tend to be looking at a long time to make returns on investment. In telecoms, we’re a bit more impatient to see the return.” He gives as an example transforming a generator from running exclusively on diesel power into running on battery power and solar energy, where the return on investment could take as little as 18 months. Where this is undertaken across an entire network, where some of the sites are off grid, the return could take a little longer, but he believes it would still be achievable within two years.

But not all projects are so neatly packaged. Wardell admits, “It tends to get a little more difficult if the return is four or five years. The telecoms industry is just not used to that kind of length of return. In the energy sector, if you deploy a piece of equipment it may take 20 years to see a return, but in telecoms it’s different. We’ve completely changed two generations of equipment in 20 years.”

Saving the benefits

It is therefore undeniable that many of the decisions which impact upon green and environmental issues are motivated by a desire to reduce fuel costs and other expenditure. This is not to say that the environmental benefits underlying those decisions are unappreciated. But it is realistic to admit that green factors are not always the driving force behind the adoption of green technology. Neil Downing, director of corporate products and services at Interoute, says: “Call me cynical, but in the heightened grip of the recession, I definitely noticed that customers’ concerns about green issues waned significantly. A couple of years ago, they had been much higher up the agenda. But now concern about the environment is starting to return.”

Savings in energy expenditure and environmental benefits are really inseparable. “If there is one sound bite that sums up how we feel about this, it is that we think of being green and being efficient as almost one and the same,” says Downing. “Energy is a big part of our ongoing operational costs, and every advance we’ve seen in telecommunications in the last decade, whether it’s improvements in power consumption or space consumption or manpower, has also been a significant improvement in terms of the environmental impact. So cost saving benefits come with environmental benefits as well, but we do tend to look at them in the context of the business case.”

Green solutions

On a continual basis, technological developments have made energy savings achievable. Monitoring and controlling systems, diagnostic equipment, power conversion devices, photonic integrated circuits, advances in switches and ambient air cooling systems are just some of the developments where new technologies have reduced the power levels needed to maintain and upkeep telecommunication networks.

Reactions to the role which some other green solutions, such as solar power and wind farms, can play in the future of telecoms can be mixed, however. Where energy can be sourced from ethical sources, a number of players are prepared to accept some small additional costs. As Downing says, “We are looking at where we buy our energy. At our data centre in the Netherlands, we pay a modest premium to buy all the power from a green energy company that only uses renewable sources.” However, Downing is much less enthusiastic about the prospect of powering his data centres by installing solar panels: “The cost benefit analysis doesn’t look great, especially when you take into account the fact that our customers are paying us for absolutely continuous 100% power supply.”

There are similar levels of scepticism about suggestions such as moving data centres to Greenland or Iceland, in order to exploit the natural resources and energy reserves. As Downing says, “No matter how cold it is and what that does for your power bills, it’s not realistic for the entire data volumes of Europe to be offshored in Iceland. But we’re looking very aggressively at the operating temperature that we can run data centres at.”

Managing life cycles

The energy consumed by networks and data centres is not the only ecological issue to be considered, however. Another concern to carriers is looking at ways to extend the life of networks: there are often moments when carriers need to decide whether it is time to replace a network, or if it is possible to make the existing network last longer.

This is a subject of significant interest to Glenn Fassett, general manager of Network Hardware Resale, which resells used and tested equipment from Cisco, Juniper and other manufacturers. Its declared aim is to help companies address the challenges associated with life cycle management. “We offer a completely different value proposition than the manufacturers do,” says Fassett. “Our success is predicated upon extending the life of the network. Manufacturers’ success is often, if not always, predicated upon the sale of new products into the market space. They have developed shorter and shorter life cycles, so that customers feel the pressure to do a wholesale upgrade. The actual, effective life of a network far exceeds how long a manufacturer decides to sell that product.”

There are, of course, other factors than pure environmental ones to consider, such as warranty, whether it is possible to obtain replacement parts, and whether upgrades – rather than replacements – would give carriers access to technological advances which cannot be obtained within their current network.

The question of what savings can be generated by delaying an infrastructure upgrade needs to be taken into account, as does the question of whether more energy savings are available by instead switching to the latest, more efficient technology. And the ecological impact of refurbishing and redistributing technologies, as opposed to manufacturing it, are issues which require more examination, as Fassett admits: “In terms of comparing the actual carbon footprint of manufacturing to the effect of refurbishing, I don’t have any figures. Intuitively, I know that the carbon footprint associated with manufacturing far exceeds that of repurposing kit.”

There are also other ecological issues to consider, some as the impact which installing and managing a network can have on the landscape and physical environment. A number of carriers have found unique solutions to some of the problems created by the industry. Annette Murphy, sales and business development director at Geo Networks, says: “We have our network in London in the sewer environment, which means we have minimal requirements to close roads or surface build.”

Is environmentalism sustainable?

“Sustainability is one key avenue that the telecoms industry is exploring,” says Sanjeev Kumar, senior principal consultant at Infosys. “However, it does raise the question: should sustainability be seen as something to take advantage of, or will it divert attention away from the main challenges the telecoms industry faces?” He believes that careful assessment of the situation is essential: “Monitoring, controlling and accountability solutions, which focus on energy efficiency, can help companies truly understand their energy usage and highlight where improvements need to be made.”

Without question, carriers need to take a joined-up approach to tackling these issues, linking decisions taken for perhaps philosophical or PR reasons at board level with the impact of their implementation by the rest of the business. Just as capex and opex decisions cannot be made in a balanced way in isolation, neither can green benefits and the financial outcome of these activities be made without considering the impact of one upon the other.

The more that environmental and ecological improvements are considered within the business context, the more likely the business is to benefit from the range of green options available to it.

And the more that energy savings and other benefits are extracted from environmental technology, the more carriers will be able to implement those changes successfully, and in a controlled and ongoing manner.

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