At the 2018 TowerXchange Meetup Africa we will be hosting a follow up energy focus group to the 2017 edition. Here we summarise the key take homes from 2017 discussions which will be built upon this coming October.
Whilst normally accessible for subscription holders only, the full energy working group report is available free of charge until Friday 22 June. To obtain your copy please email Annabelle Mayhew: amayhew@towerxchange.com
Baseline stats on the tower portfolios represented in the working group
Energy working group participants at the TowerXchange Meetup Africa 2017 were treated to rare insights into the energy operating environments of some of Africa’s largest MNOs and towercos.
MTN revealed that of their 57,000 sites, around 40% were co-located with towercos. Of around 10,500 sites in South Africa, just 53 were off grid hybrids. Of 11,000 in Iran, 13 were off grid hybrids. Meanwhile, around 40% of MTN Afghanistan’s 1,200 cell sites were on grid, with the majority of the balance diesel genset (DG) plus battery hybrids. Of a little over 800 sites in MTN West and Central Africa (Benin, Guinea Bissau, Guinea Conakry and Liberia), where the grid was described as unstable, 80% of sites were charge discharge battery hybrids. Political challenges in Syria meant that at the time of the event only around half of MTNs 2,000 sites were operational. Of those sites, around 80% are hybridised with the rest running dual DGs 24/7. Most of the network was off grid with just a handful on grid, mostly in Damascus. MTN’s tower network in Sudan of a similar scale – around 2,000 sites, 30% of which are on grid, with half the balance running dual DGs 24/7, the other half hybridised. All 250 MTN sites in South Sudan are off grid, and they are 100% hybridised. Of 350 MTN sites in Yemen, around 100 had been hybridised, with most of the others running on diesel. Finally, all of MTN’s 310 sites in Swaziland are on grid, with around 100 hyrbidised where the grid connection is unreliable.
Airtel operates 2,199 cell sites in Tanzania, of which just over a third are leased, the balance owned. 77% of their sites are on grid – of the 500 off grid, 300 are hybridised, of which 20% use solar.
At the time of the TowerXchange Meetup Africa 2017, Helios Towers operated 3,475 towers in Tanzania, of which around 80% were on grid; 1,836 towers in the DRC, of which 45% were on grid; 806 in Ghana, all but 10 on grid; and 384 in Congo Brazzaville, around half of which were on grid, half off grid. Across the Helios Towers portfolio, availability of usable grid power ranges between 15-16 hours per day in the DRC and Congo Brazzaville and 20 hours per day in Tanzania.
The Safaricom tower portfolio in Kenya consists of around 5,000 sites, of which around 80% are owned by Safaricom, 20% co-located. The mix of site typologies is just under 80% greenfield with the majority of the balance being in building solutions and small cells. Around 60% are on good grid connections, 25% on bad grid, and 15% off grid. The majority of Safaricom’s sites are DG plus battery hybrids, with some solar in the mix. A little under 150 sites still run on dual DGs 24/7, and a handful run on renewables only or on powercubes. In some instances the landlord or towerco provides power as a service.
Econet operates around 1,500 sites in Zimbabwe, of which 46 are off grid, running on solar battery hybrids. Around 60 of those 1,500 sites are co-locations on third party towers. Grid availability is around 95%. 140 of Econet’s ~470 sites in Burundi are off grid, and they are in the process of being hybridised. Grid sites suffer much lower availability than Zimbabwe – as low as 40%. 39 of Econet’s 187 sites in Lesotho are off grid, again running on solar battery hybrids. The grid is relatively good in Lesotho and there are around 30 co-locations included in Econet Lesotho’s 187 site count.
The situation is simpler for PowerCom, Telecom Namibia’s towerco. Only one of their 300 sites is off grid (solar only), and the operators retain responsibility for their power systems. With good grid availability in Namibia, most sites need only rectifiers and battery banks, with backup DGs only on critical sites.
Angola’s first towerco ANTOSC has seen their rollout slowed by the oil crisis – they’ve deployed their first 15 sites and they are all off grid, using DG battery hybrids. They are solar ready but installation of PV arrays is impeded by the cost of land. ANTOSC mentioned that the only good grid (>15 hours of usable grid per day) is in the capital Luanda.
Finally, we also heard from Africa’s first bona fide ESCO: Energy Vision, which owns and operates the power systems at 300 sites in Gabon, a third of which are off grid and hybridised.
Approximate proportion of cell sites on grid versus off grid (black segment) in the portfolios discussed
What and how they buy
We asked MTN for an overview of energy equipment upgrade programmes on their cell sites. While the equipment in several countries had been recently replaced, they highlighted current or imminent procurement requirements in Liberia and Guinea Bissau, with rebuilding programmes on going in Afghanistan, Syria and Yemen. Major replacement programmes will be in the pipeline for Sudan and South Sudan once capex resumes.
How do MTN buy? A mandatory proof of concept is required on technology shifts, a process which takes three to four months and which must be undertaken at the vendor’s risk. Only approved suppliers receive RFPs. It should be noted that MTN has no formal influence on their towerco partners’ procurement.
Airtel’s procurement process is split between Africa and India, with spares and commodities sourced in Africa, and India’s input required on major capex projects. There is an annual procurement process at opco level, with Group approval. A significant network modernisation programme is in progress, driven from India. Vendors can get registered as an approved supplier through Airtel’s team in Kenya.
Econet’s procurement is not centralised, driven instead by the local CTO. Energy equipment upgrade was described as a continuous process. At the time of the event foreign remittances were presenting a challenge to procurement in Zimbabwe, with local currency payments preferred, something Huawei and ZTE were providing support with. After typical two to three month RFP and proof of concept processes, 50-100 sites trials were awarded to vendors prepared to take on some risk. FG Wilson is a key DG supplier, and Econet are open to considering DCDGs. NorthStar batteries (via Emerson) and Shoto batteries (via ZTE) were key energy storage suppliers, with lead acid remaining the predominant chemistry. Batteries were typically on a four to five year replacement cycle. A recent programme had hybridised 155 sites with solar and a combination of lead acid and lithium ion batteries. Econet’s representative mentioned that some hybrid controllers were currently being replaced.
Safaricom’s operations team was leading their network modernisation, again described as a continuous process particularly insofar as replacement of DGs and batteries was concerned. An RFP had just concluded for DC rectifier cabinets on a three year contract, while another three year contract for DC generators had been released on the morning of the event. Respondents to RFPs must qualify as a supplier first, self-registering online in advance of procurement’s due diligence evaluation. Safaricom checks with Vodafone Procurement Company (VPC) to mutually onboard from supplier lists, but the message seemed to be that vendors shouldn’t solely approach Safaricom through VPC. Lithium-ion had been trialled, and an RFP was imminent. A call to action was given for an “industrial solution” to lithium-ion battery disposal / buyback in Africa.
How does one introduce a new brand / product to Safaricom? As usual a proof of concept is required, for which terms and success criteria must be clear at the outset. If new products are “aligned with strategy that year, it’s relatively easy to introduce them.” Any new supplier seeking to displace an incumbent must demonstrate a dramatic improvement. There is no predefined yardstick in terms of TCO required to displace an incumbent solution. Safaricom contracts are typically of a three year duration, renewable.
ESCO Energy Vision reported anticipating four year battery replacement cycles (using NorthStar and EnerSys batteries), whilst they also leverage solutions from Eltek and Flexenclosure.
When the management team at Helios Towers changed three years ago, they moved from using a relatively broad range of suppliers to an increasing level of standardisation. RFQs last year eventually led to three year contracts for selected partners, such as Generator Logic and Eclos for DGs, Eltek and Delta for rectifiers, and NorthStar and Lead Crystal for energy storage. Despite their standardisation, Helios Towers remains open to new technologies, for example they have undertaken field trials of lithium-ion batteries. “Where we can hybridise, we do,” Helios Towers’ representatives told participants. For example, solar is used at several cell sites in the DRC as the delivered cost of a litre of fuel, which at the time of the event retailed for around US$1.40, could be as high as US$4. With Eltek and Delta’s systems being solar-ready, there was no need to acquire new hybrid systems – they just add modules and shelves for PV.
Helios Towers is on a mission to reduce opex, exemplified by their one site visit per month initiative. Products must support this mission, which means extending DG maintenance intervals and reducing the need for filter changes. “We want to target one site visit every six months, which means we need your help in building an holistic solution to efficient, autonomous cell site energy solutions,” concluded Helios.
How to sell to Helios: don’t pitch their local opcos, talk to their Technical Director, or to their Director of PMO. And if you don’t know who they are, you need to come to the TowerXchange Meetup to meet them!
Selected Q&A
Q: When evaluating lithium-ion batteries, have you developed a preference between lithium iron phosphate and NMC?
A: It’s too soon to say – we’ve only just started evaluating them, and each chemical has its pros and cons in terms of health and safety, stability, cycles and recycling.
Q: Where you are seeking to reduce site visits – particularly unplanned site visits – what elements contribute most to opex savings?
A: We now have fixed maintenance costs regardless of the number of site visits, placing the onus on our managed service providers to ensure everything is done that should be done when they visit a site. This also makes it our responsibility to make sure we have the right products, such as high spec DGs and rectifiers.
Q: What steps have you taken to combat theft?
A: Theft is an operational not a technical issue. We have had to change the way we do things.
A: Embedded SIM-cards to track batteries don’t help. Re-usability is key.
Q: What is your interest in leasing or securing finance for energy equipment?
A: Our company is not looking at the ESCO model right now. A lot of our management team come from a generator leasing company, and quickly learned that DG leasing was a bad idea for an African towerco.
A: We’re open to exploring the optimum mix of opex and capex.
A: We currently favour the capex model, but we’re in the early stages of exploring the ESCO model.
Q: There is a glut of LPG worldwide now – could this be a viable alternate fuel for you given its lower maintenance requirements and it being harder to steal than diesel?
A: We trialled LPG on 20 sites in Tanzania five years ago. An LPG shortage forced a reversion to diesel at the time, but LPG or LNG could be viable alternate fuels, although we think only in Tanzania in terms of our footprint.
A: We also trialled LPG in Kenya but found delivery to rural areas to be challenging – diesel can be carried in jerry cans!
Insights from vendors invited to 2017’s energy working group
- Ausonia
- Eltek
- Enatel
- EnerSys
- KIRLOSKAR OIL ENGINES LIMITED
- Vertiv
