Why energy management is critical to 5G success

This paper explains why telco’s 5G roll-out, and their ability to monetise 5G, could be undermined by failing to address both the energy and wider sustainability issues that come with it. 5G must be deployed in an energy efficient manner to avoid spiralling costs and increased pressure from customers, investors and authorities. This report is aimed at the C-suite, but also at network operations and planners who are charged with deploying 5G, and the product and customer teams developing new 5G services that will create value and drive growth.

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5G: Designed to spur innovation and drive growth

Much has been written (not least by STL) about 5G technology being different – both in what it does and how it does it – from previous ‘Gs’. Among other things, 5G has been conceived:

  • To enable new operating models, spur innovation and introduce an explosion of tailored connectivity and tightly coupled applications (e.g. low latency, high reliability, IoT)
  • To sustain the growth in data traffic that we have already seen with 3G and then 4G

Although many operators globally have yet to launch 5G, the roll-out is gathering pace and expected to achieve significant global coverage by 2025.

Actual data traffic volumes will move to 5G networks faster than coverage or subscriber adoption. This is due to take up of new 5G services, the nature of consumer adoption cycles (earlier adopters are heavier users) and coverage concentration in more populous areas. For example, in South Korea 5G accounted for over 30% of all mobile traffic by the end of 2020, although only 15% of subscribers were on 5G and much of the country is still not covered.

STL Partners project that global 5G traffic may overtake 4G traffic as soon as 2026.

Projected 5G traffic volumes by region

The 5G energy challenge

5G networks, done right, can limit carbon emissions and even reduce the overall energy consumption of telecoms operators, but given the number of factors at play, things will not fall into place on their own.

5G can curb excess energy use…. if done right

In terms of energy required per unit of data transmitted, 5G networks are an order of magnitude more efficient than 4G networks (much of this due to the air interface, particularly MIMO arrays packing in a greater number of antennae). 5G networks can also be more ‘energy elastic’, with energy consumption more closely tracking network use: high at peak times, largely dormant at quieter times. Cloud-native 5G standalone core and virtualised RAN will make it far easier and cheaper to adopt performance improvements in hardware and software. Open RAN will spawn new commercial and operating models in RAN sharing / wholesale / neutral hosts.

However, as the higher performance and lower cost (per GB) of 5G services will result in increased use and accelerate traffic growth, this will negate some of the efficiency gains. Furthermore, to achieve coverage, 5G networks will initially represent another overlay network requiring additional equipment and energy. Due to the higher frequencies, 5G will need more cells than 4G networks and 5G cells will typically have peak power requirements higher than 4G sites. Initially at least, this power will be additional to that supporting existing networks.

Another complication is the cloud-native nature of 5G networks which means that these will run on commercial-of-the-shelf (COTS) servers. Although potentially cheaper to buy and more efficient to run than traditional telco equipment, such servers are designed to run in ‘data-centre’ technical facilities: with more specialised cooling and power requirements. Due to the nature of networks, these servers will be distributed across many, smaller ‘edge’ facilities as well as a few big ones. And, in addition to housing servers for network functions these distributed facilities may also support edge compute resources for telco customers’ 5G-enabled applications such as AR/VR.

These distributed edge sites need to be specified, equipped, commissioned, and operated differently than in the past. Failure to do so risks inefficiencies and a jump in both embedded and ongoing emissions. To compound things, these sites will not all be greenfield ones. In many instances, they will be collocated with existing equipment, or use refurbished space in central offices, branch exchanges or older self-contained technical enclosures delivered by truck.

To reduce energy consumption and OPEX at telco sites and across the telco networks, one answer would be to begin to de-commission previous generations of mobile technology. De-commissioning 2G, 3G and 4G mobile networks would have a net beneficial effect on the carbon emissions from all the networks.

However, there are issues with de-commissioning, given that customers and applications rely on 2G and 3G even in advanced economies, smart meters being a key use for 2G, for example. There are also regional divergences: while many Asian countries have fully de-commissioned 2G and countries such as Germany aims to have fully de-commissioned 3G by 2022, by the end of 2019F 46% of consumers of mobile connectivity in Africa still used 2G.

This attests to a wider challenge when evaluating how telcos can reduce their carbon emissions in the Coordination Age: different regions are at very different stages of 5G deployment and face different challenges and solutions with regards to energy management as a whole.

Regions with different 5G take-up face different energy challenges

An added challenge with deploying 5G in a sustainable manner is that telcos cannot lose sight of resiliency and cost. Energy performance and sustainability goals need to be aligned with financial and operational objectives and incentives, not competing with them. We set out how this can be achieved in this study.

Table of Contents

  • Executive Summary
  • Preface
  • Introduction
    • The Coordination Age – a new role and purpose for telcos
    • Resource efficiency and the Coordination Age
    • 5G: Designed to spur innovation and drive growth
    • Challenge 1: The 5G energy challenge
    • Challenge 2: A rapidly changing business climate
  • How can telcos pursue growth through 5G and meet the challenges of the changing business climate?
    • Adopt energy best practice in 5G design, procurement, deployment, and operations
      • Best practice operates at multiple levels…and across them
      • Focusing action for your operator
    • Drive customers’ transition to low emissions through 5G-enabled services
      • Who to target?
      • Specific steps in driving customer efficiency through 5G
  • Conclusions and recommendations
    • Preach what you practice
    • … as well as practice what you preach
    • Recommendations for telco leadership

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How 5G can cut 1.7 billion tonnes of CO2 emissions by 2030

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The chartpack for this report is available to download as an additional file

Explore this research further by joining our free webinar 5G’s role in reducing carbon emissions on Tuesday November 10th. Register for the webinar here.

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Transitioning towards a carbon-neutral world

Carbon reduction targets have been set at global, regional, and many national levels to tackle climate change. The Paris Agreement was the first universal, legally binding global climate change agreement. Adopted in December 2015, close to 190 countries agreed the long-term target to limit the increase in global average temperatures to 2 degrees Celsius above pre-industrial levels. The EU also has a binding target to cut emissions to at least 40% below 1990 levels by 2030, as well as achieving at least a 32% share for renewable energy and at least a 32.5% improvement in energy efficiency.

This report will focus on the way in which technology, in particular 5G, can enable individuals, businesses, the energy industry and governments to accelerate the transition to zero carbon emissions.

This analysis is based on desk research, an interview programme and survey with industry leaders, as well as detailed economic modelling to quantify the benefits that 5G can bring, and the contribution it can make to achieving carbon emissions targets.

A framework for thinking through the carbon emissions challenge

The main mechanisms through which technology (including 5G) can reduce carbon emissions arising from our consumption of energy, fall under one of three categories:

  1. Green electricity generation: increasing the proportion of electricity generated from renewable energy sources
  2. Transition to electricity: as electricity becomes greener, moving away from energy that is directly delivered through combustion of fossil fuels towards delivery through electricity
  3. Energy efficient consumption: reducing the amount of energy required to achieve the same outcomes – either by not consuming energy when it is not needed or doing so more efficiently
A framework for outlining the key mechanisms for reducing carbon emissions

Source: STL Partners

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Greener electricity generation

Generating ‘greener’ electricity is a fundamental part of any carbon emissions reduction strategy. Energy analysts forecast that it will still take decades for a substantial amount of the grid to be powered by renewable energy sources. The chart below demonstrates the current prevalence of coal and gas in our electricity networks, with some contribution from nuclear and hydropower. By 2030, we will need rapid growth of wind and solar, but it only becomes a significant proportion of world supply by 2040.

Forecasts predict that future electricity generation will come from growth in solar and wind

Source: DNV

Renewable energy generation must grow enough to meet three challenges:

  • Replace current electricity generation from fossil fuels
  • Provide electricity to power directly supplied by fossil fuels as these transition to electric power (see transition discussion below)
  • Meet future demand arising from economic growth.

Moving from fossil fuels to wind and solar energy presents new challenges for balancing the electricity supply system. Due to the variable nature of these renewables (it’s not always sunny or windy) and our limited ability to store energy (with current battery technologies), the growing dependence on renewables means that supply cannot be controlled to meet demand. New business models enabled by millions of connected devices (washing machines, electric vehicle chargers) will allow us to reverse the market model such that demand meets supply.

Further in this report we describe in more detail how 5G networks will enable the acceleration of greener energy supply by:

  • Improving the cost competitiveness of renewables (in particular, by reducing operating costs).
  • Ensuring that renewables can contribute to the bulk of our energy needs, by supporting new business models ensuring energy demand across millions of appliances is managed in response to the fluctuating nature of renewables supply.

Transition to electricity

The second major mechanism to reduce carbon emissions is transitioning to using electricity as the primary source of energy for applications that currently rely on fossil fuel combustion. The two big transitions are the move from:

  • fossil-fuelled cars and trucks to electric vehicles
  • gas boilers to electric heat pumps.

Using electricity to power these appliances and processes is more energy efficient than burning fossil fuels and can therefore deliver an overall reduction in energy use and carbon emissions even if the grid is only partly ‘decarbonised’.

However, this will create a seismic change in energy consumption. Taking the UK as an example, the energy used for heating space and water is almost double that used for total electricity consumption in the country. Space and water heating is largely fuelled by gas today. Meanwhile, transport used over two exajoules of energy in 2018. Shifting these to electricity will put unprecedented burden on our electricity networks.

Comparing UK energy consumption for space heating, water heating and transport to total electricity consumption (2018)

Source: UK National Statistics

As well as the need to meet demand with supply discussed above, the other consequence of moving away from fossil fuels is that it may be more difficult to keep the electricity grid stable. Historically, turbines from traditional power generation stations have provided inertia, which has helped to maintain a buffer when demand for power changes over a short time. Power station turbines’ rotational inertia effectively absorbs and releases energy in response to fluctuating demand, resulting in grid frequency variations. To keep the grid stable and mitigate blackouts, frequency needs to avoid deviating by more than 1-2% from the target of 50 or 60 Hertz. Removing traditional thermal turbine generation means that solutions must be developed to provide highly-reliable sub-second responses – precisely the type of requirements for which 5G was developed.

5G networks can enable the acceleration of this transition from direct fossil fuels to increasingly renewable electricity by:

  • Improving the performance and cost-effectiveness of electric-powered alternatives (for example, by making electric vehicles much cheaper to buy and as convenient to refuel as fossil fuel vehicles through optimised battery lease-and-swap networks)
  • Providing high-reliability, low latency connectivity to the energy suppliers and users committed to maintaining stable frequency across the electricity grid
  • Ensuring that renewables can contribute to the bulk of our energy needs, by supporting new business models ensuring energy demand across millions of appliances is managed in response to the fluctuating nature of renewables supply (for example, by charging electric vehicles or heating domestic hot water when renewable supply is at its peak).

This report is part of a series of research on the role of 5G in accelerating digital transformation. Other reports within the portfolio include:

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Curtailing carbon emissions – Can 5G help?

With big data traffic, comes big energy costs

In 2009, mobile phone networks carried 91 Petabytes (that’s 9.1×1016 bytes) of data per month. Ten years later, mobile networks are estimated to carry around 30 Exabytes of data per month. That’s 30 x1019 bytes or 15 billion HD movies, or an average of 2.5 movies for the 6 billion smartphone users on the planet. This represents an increase of over 330-fold in data traffic. This rapid increase in data carried by mobile networks is projected to slow, but even a reduction in CAGR to 30% a year would see volumes reaching over 130 Exabytes a month in 5 years.

This increase in data travelling over mobile networks reflects the increasingly data-heavy applications running on mobile devices as well as the increasing penetration of smartphones in many developing markets. Although enterprises and public sector firms will also drive demand for mobile data, this is minor compared to consumer user demand. As mobile device penetration rates continue to increase and mobile device owners adopt more data heavy applications such as video streaming and immersive experiences, growth in volumes will continue far past 2024 and we could easily still see a 20-fold increase over current levels over the next 10 years.

In many ways this is exciting, as more computing power reaches the hands of more people around the world delivering applications that help billions of people in their daily lives. But this comes with a caveat – there is an input inherent in delivering this data traffic: the energy needed for running the network infrastructure.

The electrical energy required to power networks represents a cost to operators, but it also represents CO2 emissions arising from burning fossil fuels to power the network (either directly from local dedicated generators or through the power grid). Greenhouse gas emissions therefore also risk increasing significantly as a result of data growth, particularly in countries heavily dependent on fossil fuels for their electricity production. Previously, this has been managed by the fact that mobile networks have been optimised to support larger amounts of data with a similar topology in terms of infrastructure, if slightly higher energy needs and costs. However, as spectrum is a limited resource, continued growth of mobile traffic over current LTE networks would quickly lead to densification – an increased amount of antenna and network infrastructure – by some estimates this would be an increase of 160% by 2025.

Even with improvements in hardware performance, growth in mobile data over LTE networks would result in significant growth in energy consumption which represents a significant source of emissions. This is at odds with the goals that operators have set for themselves in terms of greenhouse gas emissions and risks breaching the standards to which (consumer, public and private sector) customers are increasingly holding their suppliers. Investors are also factoring in the higher risk profile associated with companies with high carbon emission exposure5. Finally, this also matters to employees – particularly younger ones with the digital skills-sets that operators are looking to attract.

The key question posed by this dilemma then is: How should mobile network operators deal with this rapid rate of growth in data and the associated energy consumption and CO2 emissions?

In this report, we focus on one part of the answer – accelerating the adoption of more energy efficient 5G technologies and associated operational practices. A faster roll-out of 5G networks is a key weapon in operators’ arsenal of measures for de-coupling energy costs and carbon emissions arising from data growth.

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Scope of this report

Network operators need to mitigate the ever-increasing energy costs and carbon footprint of their networks resulting from the forecast data growth in some way. There are six ways that the accelerated adoption of 5G can do this:

  1. Direct curtailment of energy consumption in mobile access networks through the better energy “performance” of 5G network equipment and operational practices relative to 4G.
  2. Direct curtailment of energy consumption in 5G core networks through the better energy “performance” of network equipment and operational practices relative to 4G core networks.
  3. Reduced energy consumption by devices (particularly smartphones and IoT devices).
  4. Decarbonising the grid: indirectly enabling lower levels of national carbon emissions from electricity generation through 5G supported “smart-grid” applications, increasing the proportion contributed by renewables and improving wider efficiencies in distribution and non-renewables generation.
  5. Indirectly improving energy efficiency across all sectors through reducing waste and improving operations. Reduced emissions are largely a by-product of improved productivity and process efficiencies.
  6. Reducing carbon emissions from travel through reducing the number of journeys (e.g. remote monitoring and management, virtual meetings) and reducing the emissions per journey.

Areas where 5G could impact global carbon emissions

Areas where 5G could impact global carbon emissions

Source: STL Partners

In this report, we focus on the first two – the management of energy consumption via increasing the carbon performance of the network (expressed as a reduction in the tonnes of CO2 per TB of data transmitted). While we see significant potential upside in “de-carbonising the grid”, in enabling greater energy efficiencies and reducing waste across the economy, these are not in operators’ direct control. They are also more challenging to estimate. We would recommend this form part of a future study.

For nearly all operators, over 90% of the direct energy usage of network operators is accounted for via electricity drawn from the grid to service their own networks. Limiting the growth of this would represent the largest direct reduction in future greenhouse gas production for a mobile network.

Four scenarios modelled

We have modelled our analysis around four 5G scenarios. We treat each of these scenarios differently in our model and scenario assumptions vary by country type.

No 5G roll out

No 5G roll out assumes that there is no roll out of 5G radio access or core technologies. This scenario shows emissions growth well below the growth in data volumes. This is because we anticipate reductions from lower-carbon power generation (e.g. renewables) and significant performance improvements in 4G core and access networking. These are discussed at length in this report.

Slow 5G rollout

A slow roll out of 5G would see the most delayed launch dates for 5G (between 2021 and 2024) and assumes that 5G accounts for the lowest share of data volumes over time (10-25% by 2025 and 60- 80% by 2030).

Medium 5G rollout

A medium roll out of 5G can be considered a base-case. This would see an average launch date of 2019-2022. There would see a significant volume of data running over 5G – up to 60% by 2025 and 85% by 2030. Implicitly, we would expect decommissioning of 2G or 3G (or even 4G) networks with spectrum re-farming to 5G.

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Table of Contents

  • Preface
  • Executive Summary
  • Introduction
    • Scope of this report
  • Four scenarios modelled
  • Our findings
    • Faster 5G roll out could reduce cumulative carbon emissions by 0.5 billion tonnes of CO2 globally by 2030
  • How will accelerating 5G roll-out reduce carbon emissions from mobile networks?
    • 5G technologies as drivers of sustainability
  • Country level findings: Uneven distribution of carbon savings
  • Conclusions and Recommendations
    • Operators
    • Regulators and other national authorities
    • Tower and power suppliers
    • Technology providers
  • Methodology
    • Projections
    • Scenarios
    • Country level differences
    • Other Assumptions
  • Appendix

Table of Figures

  • Figure 1: Faster 5G roll-out would have a material impact on greenhouse emissions
  • Figure 2: Areas where 5G could impact global carbon emissions
  • Figure 3: Cumulative reduction in emissions under different roll-out scenarios
  • Figure 4: Projected CO2 emissions from mobile networks under 4 scenarios
  • Figure 5: Where do emissions reductions come from
  • Figure 6: Access technologies’ evolving energy performance
  • Figure 7: Carbon intensity of different countries used in modelling emissions
  • Figure 8: Potential reduction in emissions from fast roll-out of 5G against carbon intensity of grid
  • Figure 9: Top 30 Countries by potential reduction in emissions from fast 5G roll-out
  • Figure 10: STL’s carbon emissions methodology