Elisa and the Wider Telecom Role in Achieving Zero-Carbon Energy Transition

The telecom industry has voluntarily set a science-based target for carbon emission reductions (zero-carbon by 2050) and MNOs adopting this target will need to switch to renewable and low-carbon energy. Renewable energy sources such as wind and solar are unpredictable and intermittent by nature, therefore, Elisa has developed a unique Distributed Energy Storage (DES) solution to smartly manage the demand-supply balance and enable zero-carbon energy transition. Elisa’s DES enables a distributed virtual power plant to be deployed using the Radio Access Network (RAN). It is built on an Artificial Intelligence/Machine Learning (AI/ML) engine that optimizes energy management by adjusting the battery between charging and discharging modes.

On 16 February 2023, Elisa has been granted €3.9 million in funding by the Finnish government to rollout of the DES solution, allowing Elisa to target 150 Megawatt-hour (MWh) storage capacity and creating Europe’s largest distributed virtual power plant.

The impact of the fossil fuel crisis and net zero emissions ambitions have rapidly increased the deployment of renewable energy. Latest statistics from the International Renewable Energy Agency (IRENA) reveal that worldwide power generation capacity has continued to grow steadily despite global uncertainties, amounting to 3372 Gigawatt (GW) at the end of 2022. Renewable generation capacity has increased by 9.6% in 2022, with hydropower accounting for the largest share, followed by solar and wind. The long-term trend is that renewable energy production will undergo continued growth in the following decades, and the demand for innovative storage solutions will grow with it. Renewable energy can generate a large amount of surplus which could be deployed usefully and profitably. The development of storage capacity and smart management system is the key to harnessing this power and unlock their full potential.

The telecom sector is a large user of battery storage and regulators often require the Radio Access Network (RAN) to have a backup power supply to ensure the network is running as usual when there is disruption from the national grid. There seems to be a huge market opportunity for smart energy storage solutions and management tools within the telecom industry. By deploying this DES solution, MNOs can optimize the time of energy consumption and control costs when price fluctuates. In addition, MNOs can also use it to provide electricity grid balancing services by adjusting electricity consumption based on control signals sent by the Transmission System Operators (TSO) and generate additional revenue. In 2022, Elisa has conducted trials in 200 base stations in its Finnish network, and electricity cost was reduced significantly. Buying and storing electricity when price is cheaper to be used at peak consumption times when price increases. Trials are also taking place in Estonia. Elisa claimed that if the solution is fully deployed, it is expected to achieve a marginal reduction of 21,900 tons carbon emission per year.

Elisa’s DES solution has proven to bring operational, financial, and environmental benefits based on trial results. Such a type of solution is an essential step towards a carbon neutral economy and has arrived at the right time. Now, there is an energy crisis due to Russia-Ukraine war and energy price is sky high. Even when the energy crisis passes, energy price volatility may still remain as the world switch to renewable energy production.

Many major mobile operators (T-Mobile, Verizon, Orange, Vodafone, Telefonica, and many others) have invested in renewable energy generation at their sites or signed Power Purchase Agreements (PPAs) for clean energy to commit to their carbon emission objectives. They should implement innovative solutions like DES to facilitate the further deployment of clean energy sources such as wind and solar and maximize their impact. Meanwhile, they should seek any possible tax credits for these type of green energy investments. Integrating energy storage with renewable energy source at site level may have the potential to halve their carbon emission level or perform even better, case study from academic research have shown that combining energy storage with renewable energy generation can lead to a 60% reduction in carbon emissions at a local level (1,2).

Implementing energy storage solution requires Capital Expenditure (Capex) investment and resources are limited for many MNOs. So, Elisa offers different business models to allow MNOs to build up their storage capacity within their budget to overcome this barrier. As explained, this DES solution can help MNOs to optimize their energy consumption and can be used to offer load-balancing services to generate extra revenue. According to Elisa, this load-balancing service alone is sufficient to build the business case, and the payback time is one to three years based on the financial terms in the energy market in 2022.

While the DES can be used to provide load-balancing services to generate extra revenue, one point to highlight is that electrical energy storage may have high carbon emission factor (i.e., 0.55 kgCO2/kWh when operated for renewable energy balancing, which is not ideal for reducing carbon emission purposes). Therefore, MNOs need to carefully balance between economic and environmental gains. Governments should participate in these types of green investments to strengthen the business case and help the telecom sector achieve zero-carbon energy transition.