MTN’s energy use, GHG performance, solar power and carbon reduction plans
How Africa’s largest operator is addressing climate change
With MTN’s total greenhouse gas emissions increasing and 84% of emissions originating from their communications networks, the operator’s technology, sustainability and network property teams joined the 2018 TowerXchange Meetup Africa to engage with the tower industry and energy supply chain to address the issue. TowerXchange shares the vision presented by Zakhiya Rehman from MTN Group’s Sustainability, Regulatory & Corporate Affairs Department on how the operator is working to tackle its carbon footprint and how it has used solar power.
The contribution of the ICT sector to climate change
Climate change poses a multitude of threats to the global population with the scientific community stating that temperature rises should be limited to 1.5-2°C before the end of the century to mitigate the worst impacts. With economies dependent on fossil fuels for growth, major steps need to be taken by the international community to help reduce greenhouse gas emissions. No single sector or company is able to meet the challenge alone, rather a concerted effort is required across the board to address the scale of the challenge ahead.
In 2010, the ICT sector contributed 2.5% of global greenhouse gas emissions, however if left unchecked, this figure is expected to rise to 14% by 2040 (to put this in context, all forms of transport globally contribute 28% of greenhouse gas emissions). Data centres remain the number one producer of ICT greenhouse gas emissions, accounting for 45% of ICT emissions, with communication networks (comprised of base stations, towers and switches) accounting for 24% of ICT emissions (figure one).
Figure one: Greenhouse gas emissions per ICT category
Motivations for ICT players and MTN to curb greenhouse gas emissions
Whilst the humanitarian and environmental impacts of climate change should (and to some extent, do) drive greenhouse gas reduction initiatives amongst global ICT players, current or potential future pressure from regulators and investors ensures that climate change remains a subject very much on the boardroom table. Whilst telecoms regulators have not yet specifically focussed on GHG emissions, general regulatory oversight is increasing and investors are already demanding transparency into how companies are reducing energy use and greenhouse gas emissions. On top of this, the effects of climate change themselves (such as flooding, droughts and temperature changes) can have a very real impact on business operations and expenses.
In the case of MTN, the MNO operates in 23 countries in the Middle East and Africa, a significant proportion of which are some of the world’s least developed countries, poorly equipped to deal with the challenges created by climate change. The operator draws customers and staff from such countries making it imperative upon them to reduce contributions to climate change and focus on the communities it uses, supports and serves.
Climate change presents business risks to MTN, both directly and indirectly. Extreme weather events resulting from climate change can cause direct physical damage to towers and base stations, whilst indirectly impacting operations through disruption of energy supply or works by contractors. The company’s emissions are tracked by the Carbon Disclosure Project which submits data to investors, plus as an entity listed on the FTSE/JSE Responsible Investment Top 30 Index, climate change initiatives from MTN come under close scrutiny to assess what kind of meaningful impact they are having.
Climate change related laws and regulation pose further risks to the operator. Carbon taxes are reported as financial risks in three of MTN’s markets (South Africa, Cameroon and Zambia) for their potential impact on energy costs. Plus in South Africa, mandatory emissions reporting for organisations with total national installed capacity of 10MW was introduced by the Department of Environmental Affairs in 2018. Whilst it is not yet clear how this data will be used, the move shows how seriously the country is taking climate change and it is highly likely that other countries may take similar steps.
Figure 2: MTN’s energy consumption and greenhouse gas emissions
MTN’s greenhouse gas emissions
Globally, the biggest contributor to greenhouse gas emissions in the ICT sector is data centres, accounting for 45% of emissions. In the case of MTN, however, 84% of their total greenhouse gas emissions come from their communication networks, more than five times that produced by their data centres, buildings and transportation combined (figure 2). In total, MTN’s communication networks use over 16mn GJ of energy a year, emitting close to 1.7tCO2e.
Figure 3: MTN greenhouse gas saving per initiative type (tonnes CO2e/ year)
How MTN reduces greenhouse gas emissions from their communications infrastructure
With the operator’s communication networks (comprised largely of towers and base stations) accounting for 84% of the company’s greenhouse gas emissions, MTN has put major focus on a combination of efficiencies and investments in lower carbon technologies to reduce emissions at their own sites. Close to 30% of savings come from the deployment of diesel hybrid solutions at cell sites, with around 15% from energy efficiency and around 20% from the use of alternative energy solutions (figure 3).
To illustrate the savings that can be made by MTN’s investments in energy efficiency and low carbon technologies, MTN highlighted an off-grid site at which a 6.6kW solar and 7.5kW wind hybrid system was installed. There would have been a significant cost of grid power even if a connection to the site could have been extended, and with the grid being powered by coal, connection would have resulted in an increase in greenhouse gas emissions. By installing the solar-wind hybrid system, MTN generated opex savings of approximately ZAR39,530 annually, avoiding approximately 16,000kWh of electricity from the grid annually and avoided annual carbon emissions of approximately 15 tonnes, thus demonstrating the significant impact that such steps have on even a site level.
Figure 4: MTN’s footprint and markets where it has divested towers
Emissions from MTN’s owned and outsourced sites
MTN has divested tower portfolios to towercos in seven of its markets (figure 4) and also uses towerco and other operator owned sites across its portfolio in markets where it retains towers. Whilst emissions from MTN-owned sites have declined steadily in recent years, as the operator has continued to outsource towers to third parties and lease space on third party owned sites, emissions from outsourced sites have grown and now account for the largest proportion of greenhouse gas emissions (figure 5).
Figure 5: Greenhouse gas emissions from MTN owned and outsourced sites (2011 - 2017)
Overall, MTN’s total greenhouse gas emissions have continued to grow, a function at least in part of the operator’s increasing subscriber base, but concerningly, so too have greenhouse gas emissions per subscriber (figure 6).
Figure 6: MTN’s greenhouse gas intensity per subscriber
Looking ahead and the importance of partnerships and cooperation
In order to curb and reduce their greenhouse gas emissions, MTN stated that they need to be moving harder and faster, finding and working with partners that are keen to pursue proofs of concepts, pilots and investments in solutions that help them manage their use of energy and drive down their greenhouse gas emissions. With an increasing proportion of emissions coming from assets outside of their control, assets under the control of towercos, partnerships with towercos to tackle greenhouse gas emissions across their portfolios also remain key, whilst cleaner technologies and energy efficiency solutions are required for their own assets.
Amongst other considerations, MTN recommend that their partners:
- Actively drive an energy and carbon reduction strategy
- Incorporate efficiency into design and retrofit plans
- Introduce energy efficiency and greenhouse gas reduction targets are key performance indicators for business units
- Demonstrate evidence of climate change risk identification and management in business processes
- Use global standards such as the CDP to transparently report on material risks and opportunities posed to their business by climate change, and actions taken to reduce GHG emissions.
- Work with network operators to share data in order to maximise transparency in disclosures
- Ideally incorporate carbon emission considerations and price climate change impacts into business cases/ new investments wherever possible
MTN’s significant engagement across the board at the 2018 TowerXchange Meetup Africa relates in large part to their quest to work closely with partners and suppliers to tackle carbon emissions. Over the course of the next 12-18 months, MTN’s technology team will focus heavily on assessing new and green technologies which can help reduce emissions, engaging with key stakeholders from across the value chain whilst working closely with partners to reduce emissions further.
If you are interested in supporting the telecoms industry decarbonise please consider attending TowerXchange Meetup in Johannesburg October 8-9th 2019.
To enquire about getting involved, please contact Annabelle Mayhew on firstname.lastname@example.org.