TowerXchange reflects on Meetup Europe 2022’s energy working group and the industry’s need to optimise energy consumption on sites, tackling growing energy costs and ensuring the industry is on track to achieve carbon emissions targets. One tool which may serve as a strong starting point is using smart meters. By providing more consistent and accurate data, towercos and MNOs can better understand how energy is consumed on sites and identify inefficiencies in equipment and power operations. But how do smart meters work, what benefits can they bring, and why are they so important for the future of tower energy management?
What is a smart meter?
Smart meters are Internet-of-Things (IoT) devices which measure and transmit data about energy consumption, helping companies better understand their energy systems. The benefits of smart metering vary depending on the degree of integration. Smart metering does not change energy prices themselves, but by providing more precise and frequently sourced data, companies receive more accurate bills and can identify inefficient energy usage. Automating the energy-reading process removes the need for manual site check-ups which saves labour costs and reduces room for human error. Smart meters can monitor the consumption of specific units and pieces of equipment while also measuring energy production. Further integration with other management systems, such as temperature control, to create large automation systems can further improve efficiency and optimise energy performance. By reducing inefficiencies, smart meters not only reduce energy costs but also cut carbon emissions to improve ESG reporting.
Troy Chapman, Chief Commercial Officer at Honeywell Smart Energy told TowerXchange that “Some of the main benefits would include things like better consumption tracking, reporting and benchmarking to allow more informed usage patterns. Data will allow demand response management to balance load, remote monitoring & shut-off which can reduce the number of 'truck rolls' and loads or leak detection to help conserve valuable resources.”
Smart metering in the tower industry
Smart meters are not a recent addition to the tower industry; TowerXchange previously covered the use of smart metering to pinpoint energy consumption on sites at Meetup Europe in 2017. During the smart metering roundtable, participants discussed who takes responsibility for power when it is a pass-through how to incentivise investing in making power cheaper or greener. Smart meters can be used to provide accurate data on site performance and, combined with an automated monitoring system, can identify inefficiencies to streamline operations. At TowerXchange’s Meetup Europe 2022 energy was once again a focus piece as a new wave of ESG reporting and sustainability goals on one hand and rising energy prices and a desire to better support MNO customers on the other have pushed the tower industry to become more energy efficient. With towercos pushing to improve their carbon footprints there is now an incentive to better understand and optimise energy consumption, even if it remains a pass-through. It was unanimously agreed on that the first step to achieving this is data; currently, the industry lacks the tools to breakdown site energy consumption, making identifying inefficiencies impossible.
MNOs are making considerable investments in upgrading active equipment to be more efficient, but this matters little if towercos are invoicing energy costs as a basic division between total expenses and tenant count. The dual role of smart metering was highlighted to both provide transparency to tower customers on their energy bills as well as providing the data necessary to identify site inefficiencies. This allows MNOs to address their two main energy efficiency priorities; to contribute towards their net-zero carbon agenda, and to provide a detailed breakdown of energy expenditures.
Targeting carbon emissions
In 2020 the GSMA announced that the telecoms industry had agreed to a Net Zero carbon emissions target by 2050, adopting the Science-Based Targets (SBTs) in line with the Paris Agreement goals. By the close of 2021, TowerXchange has tracked emission reduction targets from nearly 50 organisations finding that most have short term targets which require action today or during this decade. To achieve these goals, the industry will need to address scope 1, 2 and 3 emissions which all contribute to their total carbon footprint. Scope 1 being direct emissions, Scope 2 covering indirect emissions such as purchased electricity, and scope 3 emissions including all other indirect emissions that occur within a company’s value chain.
TowerXchange spoke to Herve Suquet, VP of Energy at Orange, who explained the towercos are going to need to know what kind of energy they are using to achieve the carbon-roadmaps they have put in place. This will require the ability to capture more accurate and precise data to create more informed financial reporting on ESG. Although some towercos are already headway into tackling their carbon emissions, others have only just started the process. For the MNOs, getting towercos to source their energy more sustainably remains a challenge as power is often a passthrough in European markets due to well-established energy grids allowing towercos to source directly from the national grid. He notes that operators have a key role to play in pushing towercos to becoming more sustainable if either entity hopes to achieve established ESG targets.
Juliette Wallace, Business Planning and Property Director at MBNL, explained that despite government and market drives pushing companies to become more transparent about energy sourcing and consumption, the industry lacks the level of sophistication required to achieve this. 15% of MBNL’s energy comes from pass-through which they can’t substantiate making it difficult to determine what percentage of consumed energy has been sourced sustainably. Cellnex for example have already implemented requirements that the energy they consume must be green. Towercos are going to need the data tools necessary to prove that they are sourcing energy sustainably, or risk MNOs relocating from their towers to those which can show their energy is green.
Energy invoicing: improving accuracy and facilitating cooperation
Smart meters are also critically important to managing energy procurement in the current chaotic and volatile energy market. A long-term view of Europe’s energy market shows strong demand growth over the next 15 years with a 2021 McKinsey report suggesting a 1.7% annual demand growth, but one dominated by intermittent production and uncertainty over total capacity rollout. Although the European market can expect to see strong deployment of renewable energy sources to supplement growing demand and phase out legacy fossil-fuel production, it remains uncertain whether the pace of renewable roll-out will be sufficient. What has been far more impactful, and far more painfully felt, has been a short-term energy crisis resulting from the war in Ukraine in which a European ban on Russian coal and oil imports, as well as a Russian ban on EU gas exports, has resulted in a global supply squeeze. This could not come at a worse time as global supply chains have still not yet recovered from the pandemic and energy consumption is rising with post-lockdown economic activity. The immediate impact of these developments has been rising energy prices which, according to an ING report, are expected to remain high for at least the next two years.
In this climate, smart meters have two key application uses. The first is to ensure that energy billing is accurate and correct. Due to power being a pass-though on grid sites, towercos can simply pass that expense on to the operator, sometimes without showing much interest in the specifics of the bill. Meter readings are nothing new in the industry to ensure that billing is accurate, but the ability of smart meters to provide far more accurate data on how energy is being consumed on sites may change the way billing is calculated. Julliete Wallace argues that towercos need to invoice tenants based on their real usage of power. Smart meters can break down the consumption of individual pieces of equipment to build a picture of what each tenant’s real consumption is. Since MNOs deploy their own equipment, real energy consumption can vary between tenants, especially those who have invested in more efficient models. With towercos checking invoices to ensure they are correctly charging tenants their fair share, and operators in turn checking the accuracy of their bills, greater vigilance ensures MNOs are not wildly under or over paying for their energy.
Smart meters are also critical in making forward energy purchases for buying on the wholesale market. MBNL use meter readings to identify variations in site benchmarks which can be used to create more accurate predictions for future energy costs. The current volatility of the energy market means that even with smart metering it is hard to make accurate predictions but would be impossible without them. More rigorous data on energy consumption patterns allows for more resilient budgeting plans when procuring energy. Juliette Wallace commented that it is the market swings which create the most budget exposure and more accurate data is needed to prevent massive over or under pay on energy.
The future of smart metering in the tower industry
Smart metering has already shown to have successful use applications in the tower industry. Orange made small-scale deployments of smart meters in combination with battery packs in Poland, seeing success in storing energy when it is cheapest and cycling it to be used during peak hours. Not only does this reduce costs but has wider benefits of reducing the demand on the national grid during peak times. However, the installation of lithium-ion batteries, site management systems, software integration and additional storage space needed comes with a hefty price tag. Operators will no doubt prioritise their investments in other sectors that are more impactful for them, such as 5G services, but towercos are well-positioned to carry the torch on exploring ways to better manage energy consumption on sites.
The solution to this may be to take one step further. By switching off from the grid upon request and relying on self-generation, towercos can assist grid operators by lowering aggregate power demands during peaks in consumption, even plugging energy back into the grid where towercos would make a profit. How much towercos would be paid will vary country to country and sometimes region to region, dependent on how much the grid owners require the service. In order to play such a role, towercos would first need to deploy smart meters and enable remote disconnect. While deploying such equipment purely for grid balancing services may not make financial sense on its own, the additional benefits of optimising energy consumption for accurate billing, improving ESG reporting and identifying site inefficiencies would make the investment more favourable. Towercos must also install excess generation capacity on sites to cover for when they disconnect from the grid, with lithium-ion batteries being a key component. Whether it makes sense to install such overcapacity depends on how much grid operators will pay for the service. As towercos start to install smart meters more widely however, one can expect that more discussions will start to happen between them and the grid operators about whether a win-win solution can be found.
