Ericsson Report - Tco2

ericsson white paper 284 23-3137 Uen Rev A | February 2010 Minimizing carbon intensity in telecom networks using TCO techniques

Climate change is one of the most compelling global challenges of our time. Compared to other sectors such as travel and transport, buildings and energy production, the ICT sector is relatively energy-lean, responsible for about 2 percent of global energy use and subsequent carbon emissions (with telecom representing just 0.6 percent). While telecom is relatively energy-lean, telecom networks are still energy-driven and energy costs represent a significant opex item that is increasingly important as energy prices rise and energy efficiency continues to be in focus. The challenge for operators is to pursue growth in telecom networks, while ensuring the 2 percent of global emissions does not significantly increase over the coming years. This environmental challenge cannot be met in a static commercial or operating landscape. New technologies and applications are driving growth in both mobile and fixed broadband data networks. These networks are expanding to serve more subscribers and increasing traffic per subscriber. From an environmental perspective, this means that while the absolute amount of energy consumed by telecom networks is growing – along with associated CO2e emissions – the carbon intensity of the network traffic is lower than the activities the traffic replaces. The goal then is to increase energy efficiency in driving additional traffic so the carbon intensity differential between that traffic and the activities it replaces is as great as possible. Due to the nature of networks, telecom operators need to employ a framework that not only includes metrics to minimize carbon intensity, but also caters to network effects: the most efficient network design draws together the maximum amount of traffic in the fewest nodes, given a set of constraints, including transmission costs, spectrum limitations, radio link budgets and/or optical limits. Each of the elements in an operator’s cost structure has an associated environmental impact. Traditionally, this impact has been given relatively little consideration by operators when making network investment decisions. Additionally, a methodology has not been in place for operators to understand cost and environmental dimensions simultaneously. There are many investment trade-offs to be studied along the way, and the approach that allows these to be investigated in the most straightforward way is TCO. By linking CO2e and associated cost evolution estimates into the TCO framework, an operator has a powerful tool to use when considering alternative network designs and power-saving features, evaluating traffic enhancements and minimizing environmental impact while improving competitiveness. TCO2 • A GROWING CHALLENGE 2

In addition to cost-effective operations, operators are also recognizing the need to respond to the climate change challenge by reducing the environmental impact of their operations. Life-cycle assessment (LCA) is the most complete methodology used when a company is considering its carbon footprint – in other words, its complete impact on CO2e emissions. For telecom equipment, the LCA framework includes carbon impacts from raw materials, manufacturing, transport and operations until it is decommissioned and disposed of. In the future, operators will need to find ways to balance investment decision-making so that it is based on both economic and environmental grounds. The approach can be referred to as TCO2, and it can help telecom players lower costs while simultaneously reducing their carbon footprint. LCA studies indicate that more than two-thirds of all CO2e emissions associated with network equipment during its lifetime are attributed to its operation. The TCO2 approach focuses specifically on network operations and efficiency gains that will lower the carbon impact. Today, TCO and CO2e emissions associated with network operations are the primary focus for operators. Figure 1: The TCO2 model Operators, however, will need to make investment decisions in the long term that consider the total cost and total CO2e impacts. Telecom operators can use the TCO2 methodology in network operations to evaluate carbon emission and energy consumption savings from different solutions and network scenarios. When an operator is building a network – or rolling out more capacity or coverage – there are choices and trade-offs to evaluate in designing and implementing the solution. When the issues primarily involve costs, then TCO is an effective framework to use when evaluating different options. TCO is useful when evaluating two or more solutions that result in the same potential to generate revenues: in other words, build one way and the annual cost structure will be A, or build another way and the cost structure will be B. Both cases can have the same revenue-generating potential, but the profits and cash flows will differ depending on the efficiency of the implementation. The cost mapping shown in Figure 2 outlines a categorization of annual costs in an operator’s income statement. All capital expenditures have been converted Figure 2: A network operator’s cost structure TCO2 • A TOTAL APPROACH 3

to depreciation, which is useful when making comparisons and trade-offs between annual operating costs and investment costs. Business-driven costs are those driven by the relationships between the operator and its customers, and between the operator and other operators (as well as corporate overheads). The result of the operator’s decisions relating Figure 3: The TCO model to its dealings with customers and other operators can be expressed in terms of traffic, which is met with a given level of coverage, capacity and quality. The operator must make decisions on how to build and operate a network to fulfill those demands. The costs related to that demand fulfillment are network-driven, and these costs are the object of the analysis. The model illustrated in Figure 3 is used to calculate alternative scenarios in order to make a cost comparison of dimensioning and building the network in different ways. TCO is used to form an understanding of the cost dynamics (trade-offs) of employing a particular set of features or design methods. The result can be expressed in a number of ways. In addition to showing it as an absolute number, it can also be divided by capacity or coverage, or the number of subscribers served by the underlying network. This can result in a number of useful metrics: TCO per Erlang, megabyte (MB) served, square kilometers (km2) of coverage, and/or per subscriber. Environmental impacts, CO2e and carbon intensity also need to be calculated with the costs for each scenario. The energy consumed, in terms of annual kilowatt hours (kWh), can be multiplied by a carbon intensity figure for the power mix supplied by the electricity grid (metric tons of equivalent carbon dioxide per megawatt hour or MTCO2e/MWh) giving an amount of CO2e for each scenario. Any other operationally related CO2e amount should be added to these figures. This includes any CO2e emitted by locally produced power, as well as figures from maintenance vehicles. The sum total CO2e for each scenario can be related to network traffic in terms of Erlangs, megabytes of data per subscriber or per revenue unit to arrive at carbon intensity. ENERGY EFFICIENCY The TCO framework – along with associated carbon intensity figures – can be applied when minimizing environmental impact. In a landscape of growing subscriber numbers and traffic, this means maximizing the energy efficiency and minimizing the CO2e costs of the delivered traffic. The approach is used in a stepwise fashion starting with network design, which explores alternative ways to build a network with the required coverage, capacity and quality, and which has the least environmental impact and demands the fewest physical resources. TCO2 • A TOTAL APPROACH 4

This approach is not limited to “greenfield” network build- EFFICIENCY OPTIONS outs, though that is where the biggest Operators focusing on the efficiency of their existing networks, have various options. savings can be made. It also applies to Three of these are: capacity expansions, modernization, • modernizing and optimizing networks, including upgrading to energy-efficient network network transformation and new hardware as part of network evolution, and reducing energy consumption in the installed service offerings. base by using energy-reducing software and capacity-enhancing features When designing and deploying • sharing assets and resources to leverage economies of scale and reduce CO2 from networks a key distinction should higher utilization of assets and resources (by sharing operational resources, passive or be made between static and full network operators can substantially lower costs and environmental impact) dynamic power demands. • changing the energy mix by supplying the network with less carbon-intensive energy All electronic telecom equipment sources from the electrical grid, or by directly investing in renewable energy sources consumes power when it is such as solar and wind powered radio sites. switched on. Power supplies, basic operating functions and signaling Operators must choose the best combination of these investment options to support their between nodes (and in the case business objectives. of mobile communications, between radio base stations and mobile handsets) consume power even when the network is not carrying any traffic. In broad terms, power-saving features are designed to lower this static power consumption. There are many features today that monitor network activity and successively power down unneeded equipment during times of low traffic without degrading quality of service. A significant portion of power consumed by a network can be termed “dynamic,” as it varies in direct relationship with the amount of traffic being handled in a network at a given time. This portion of the power consumption can be made more efficient – that is, more traffic can be handled with a given amount of energy – by employing capacity-enhancing features. Most network equipment vendors have a range of features designed to deliver more traffic through a given network. The effect of employing these features is that less power is needed for any unit of traffic. In growing networks it is both cost effective and environmentally friendly to deploy as many capacity enhancements as possible before adding more sites or nodes. Examples of such features are the use of AMR-HR in mobile voice networks, and of higher-order modulation schemes for data transmission. Figure 4 is a conceptual illustration of the way in which energy efficiency is increased through the use of a capacity- enhancing feature. Once all capacity-enhancing features have been considered, the next task in the step-by-step approach is to consider power solutions at the site and node level. Figure 4: Enabling energy-efficient growth through capacity enhancements TCO2 • A TOTAL APPROACH 5

Exploring power on a site level is critical in developing regions, where many sites do not have access to the electricity grid, or the grid supply is unstable. In such places, it is common to employ diesel gensets to supply power locally. In these cases, it is especially useful to use the TCO2 approach to optimize both costs and CO2e emissions on the site level. Here there are many trade-offs to be considered. For example: • raising the allowable operating temperature on site wherever possible to lower the cooling requirements, and lead to the use of smaller diesel gensets and to the associated reduction in fuel consumption and CO2e emissions • adding appropriate battery capacity on site and regularly cycling the batteries to significantly reduce genset running hours (both directly reducing CO2e emissions, and indirectly by minimizing field maintenance visits) • using wind and solar solutions to further reduce genset running hours and, consequently, diesel consumption and associated CO2e emissions. Note that each step under consideration entails a number of investments as well as savings. These trade-offs can be thoroughly evaluated by using the TCO2 approach. An additional area of potential savings, both in terms of costs and environmental impact – which is specific to mobile networks – is network optimization. There are many network features and services aimed at reducing interference and streamlining cell handovers, which are not immediately recognized as contributing to energy efficiency. Their combined effect, though, is to maximize the amount of traffic through a radio access network with a given amount of installed resources. Applying a TCO2 approach to investments in these features and services generally indicates both an attractive cost trade-off (versus adding more radio base station capacity) and better CO2e emissions metrics. Finally, the area of shared resources provides a number of alternatives to further reduce costs and environmental impact. Resource sharing encompasses a wide spectrum from outsourcing field maintenance and network operations, to network sharing on a passive or active basis. Each step along the continuum can mean savings in both cost and CO2e emissions. Both savings are derived from sharing resources with other operators. TCO is a powerful tool for isolating and calculating the financial impacts of employing a solution or set of features in a network build-out or capacity expansion. Each of the elements in an operator’s cost structure also has an associated environmental impact. Traditionally, this environmental impact has been given relatively little consideration by operators when making network investment decisions. Additionally, a methodology has not been in place for operators to understand cost and environmental dimensions simultaneously. The TCO2 approach provides this methodology, resulting in an ideal framework to assess both financial and environmental impacts of building and operating networks. TCO2 • CONCLUSION 6

AMR-HR Adaptive Multi-Rate – Half Rate: AMR was adopted as the standard speech codec by 3GPP in October 1998, and is now widely used in GSM and UMTS capex capital expenditure carbon intensity the amount of CO2e emitted per unit of activity, for example, kgCO2e/kWh of electricity produced, kgCO2e/km driven, kgCO2e/subscriber, kgCO2e/Erlang or kgCO2e/MB CO2e the concentration of CO2 that would cause the same level of radiative forcing as a given type and concentration of greenhouse gas; examples of such greenhouse gases are methane, perfluorocarbons and nitrous oxide depreciation the reduction in the value of long-term assets over their useful life Erlang a unit of traffic in a network equivalent to one voice hour ICT information and communications technologies LCA life cycle assessment opex operational expenditure, a measure of recurring costs TCO total cost of ownership TCO2 total cost of ownership + CO2e emissions GeSi, SMART 2020: Enabling the low carbon economy in the information age, Global e-Sustainability Initiative, 2008. http://www.gesi.org/LinkClick.aspx?fileticket=tbp5WRTHUoY%3d&tabid=60 Measuring emissions right – assessing the climate-postive effects of ICT. Ericsson white paper, December 2009 http://www.ericsson.com/technology/whitepapers/pdf/methodology_high2.pdf TCO2 • GLOSSARY, REFERENCES 7

Ericsson Report - Tco2

by Ericsson France on Mar 19, 2010

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Ericsson Report - Tco2 — Document Transcript