Note: Last year, I wrote an article for The Economist Group’s GE Look Ahead on the topic of solar microgrids combined with mobile phone towers. It’s a fascinating topic, and I owe a big thanks to the editor who asked me to research it and write an article on the topic, as well as the experts who spent time with me to discuss the matter and the World Economic Forum for picking up the story and publishing it as well. I’m finally getting around to sharing the original writeup here. Enjoy, and share with friends!
Approximately 1.3 billion people lack access to electricity, and 1 billion more lack access to reliable electricity. In total, that’s approximately 31% of the world’s population. Over 80% of these people live in rural areas, making it expensive to extend the grid to them.
Surprisingly, many of these people already have mobile phones — approximately 6 billion of the world’s 7 billion people have access to mobile phones — and many more will be getting them in the coming months and years. The good news is that the explosion of the mobile phone market and the associated need for telecom towers throughout the world provide a good opportunity for much broader energy access.
“By 2020, estimates indicate that the global telecom industry will deploy approximately 390,000 telecom towers that are off-grid, and 790,000 that are in bad-grid locations,” GSMA states (on page 6).
“This is an increase of 22% and 13%, respectively, from today.” Microgrids connected to telecom towers could help nearby communities gain access to electricity while leapfrogging the types of large, expensive, centralized grids that are ubiquitous in the developed world. The essential idea is that energy service companies (ESCOs) can provide telecom tower owners and operators with electricity at a competitive price while also providing electricity to nearby communities, with everyone being connected via the microgrid.
The other piece of good news here is that the most logical source of energy for these microgrids is often clean, renewable energy. Solar energy, in particular, is often the preferred choice due to low cost, global technology availability, simplicity of design, wide social acceptance, and adequate resources in all corners of the world.
However, that’s not to say there aren’t challenges to this model. Government promises to extend the grid to their citizens bring uncertainty to the investment case for such microgrids. Investors and ESCOs need to know that they will get a good return on their investments or else they won’t proceed at the scale needed.
“In Myanmar, where there is going to be an inevitable convergence in the coming years between the national grid expansion and off-grid power producers, the most significant ‘policy enabler’ at this point would be a secure guarantee from the government that the private sector off-grid power producers could still sell power (at the same prices and same amounts) once the main grid arrived,” Evan Scandling, Sunlabob Renewable Energy’s Managing Director in Myanmar, told GE Look Ahead. “The simplest option would probably come in the form of a feed-in-tariff. Bottom line, off-grid power producers and investors need to feel safe that their business plan isn’t going to be pulled out from under them when the grid arrives.”
Globally, a recent GSMA study found that $13.8 billion in annual savings for the telecom tower industry are possible with a switch from diesel electricity to green power. At the same time, those green power providers can help light up the homes of people relying on dirty, harmful, and expensive kerosene lighting. This seems like something governments should support via clear policies enabling and protecting the right of ESCOs to sell electricity to their citizens at competitive prices.
Chart by GSMA
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