My sustainability story: Telenor looks to renewable energy and network efficiency
When it comes to reducing greenhouse gas (GHG) emissions from its operations, Norwegian operator Telenor is clear about what needs to be done.
“It really all boils down to sourcing renewable electricity,” says Kristian Hall, Vice President, Climate and Environment, at Telenor Group.
But that is not straightforward in all geographies. Whereas in Europe Telenor is increasingly able to source renewable energy directly from wind and solar energy producers, in Asia it is having to take a different approach.
Telenor’s aim is to reduce its scope 1 and 2 GHG emissions by 57% between 2019 and 2030. Scope 1 covers GHG emissions that Telenor makes directly, while scope 2 emissions refer to the energy Telenor buys from suppliers to run its operations, including networks and buildings.
“Scope 2 emissions is still roughly a million tons of GHG emissions and it is coming almost entirely from purchased electricity,” says Hall.
One approach to renewable energy is to “source energy attribute certificates in the form of guarantees of origin. But that is not our preferred method to source renewable electricity,” explains Hall. “You could be accused of greenwashing or just buying your way out of cutting emissions.”
Instead, Telenor prefers to source electricity by power purchase agreements (PPA), which involves agreeing a long-term contract to purchase electricity directly from a renewable energy generator.
For example, Telenor has signed a 10-year agreement to purchase power from a wind plant that will be builtin Sweden by the Norwegian renewable energy company Hydro REIN. The plant will supply 330GWh of power to Telenor in its home market annually, which amounts to 86% of its Norwegian operation’s current power consumption.
And in June this year Telenor and Telia announced a joint ten-year PPA with a solar cell plant in Denmark, which is due to supply 75% of Telia Denmark’s and Telenor’s joint TTN network’s electricity consumption by 2024.
Indeed, in Europe Telenor is aiming to establish carbon-neutral business operations by 2030, aided by the purchase of renewable electricity via PPA, as well as other initiatives such as developing more energy efficient network operations.
But whereas in Europe’s deregulated energy market “you can have private agreements between two companies for PPAs [including across borders] that’s generally not possible in Asia”, explains Hall. As a result, Telenor has to rely on International Renewable Energy Certificate (I-REC) schemes in the region, including in Bangladesh and Pakistan, which recently joined the I-REC system.
“Owners of renewable electricity in those two countries can issue I-REC certificates and we can purchase them and that will have a direct effect on our emissions,” says Hall. “But it’s still not our preferred mechanism. So, what we are doing is working with partners to advocate for the use of corporate PPAs in Asia.”
In addition to working with the GSMA to promote PPA adoption in Asia, Telenor is collaborating with industrial partners outside of telecoms and has raised the issue at the World Economic Forum as well as with regional governments.
“It’s probably going to take some time to really achieve what we need because there’s a mixed set of incentives,” says Hall. “For instance, the Pakistani Minister of Energy has quite ambitious plans for renewable electricity, especially a hydro focus.”
He adds: “Pakistan has a fantastic potential for renewable electricity, both solar and hydro.” Bangladesh, however, lacks space, which Hall says hampers the development of large solar energy plants.
In the meantime, Telenor is taking what action it can in Asia and is replacing the diesel generators it uses to run base stations with solar and battery stations. “We’ve replaced 4,000 systems so far,” says Hall.
Changes in the company’s footprint will also impact on Telenor’s emissions. “Telenor is in several consolidation processes,” says Hall, including the “exit from Myanmar, which [has]…a large amount of these diesel generators. So, the baseline is changing and the focus going forward is on solar installations.”
Like every other operator, Telenor is also weighing up the impact of 5G on sustainability. In 2021, running networks and data centers accounted for 96% of Telenor’s total energy use. As it builds out denser 5G networks and data traffic rises its network teams are testing and deploying technology to rein in energy use.
“The search for renewable energy and the move to greater network efficiency are like two cogs operating together,” says Hall. “One of the focus areas is to look at AI and machine learning (AI/ML) technology to optimize the energy consumption of the active equipment.”
Telenor’s Finnish operator, DNA, for example, expected energy consumption to grow 6-7% in 2021 when it deployed 5G equipment and increased capacity four- or five-fold.
However, Hall says DNA manged to reduce energy consumption in areas of the network through a mix of AI/ML, planning, network technology choices and energy-saving features on RAN networks. AI/ML allows DNA to analyze customers’ behavior and predict their mobile data traffic requirements. DNA can then automatically and dynamically optimize its mobile sites’ energy requirements, which has resulted in a 3% energy saving on the areas of the network concerned.
At the same time, it is becoming increasingly important to measure scope 3 emissions– such as emissions from suppliers in its value chain and from customers using its products – especially as CSPs outsource more operations to the cloud.
“Out of our approximately 5 million tons of GHG, suppliers represent four million,” says Hall. “When you outsource you move parts of your own operations to your suppliers and of course you are shifting emissions [from] scope 1 and 2 to scope 3.”
Currently, it is difficult to accurately gauge the impact of using external cloud suppliers on Telenor’s overall emissions. What Telenor can do is choose suppliers that are also serious about meeting science-based emissions targets.
“The idea is that you create a domino effect by encouraging potential suppliers to set their own science-based targets, who in turn put pressure on their own suppliers.”
Hall, who has been working in sustainability for the past two decades across different sectors, has witnessed many advances by government and the private sector. Today, however, he is concerned about the impact of the Ukraine war on cleaner energy sources.
“Regulation like the EU taxonomy is a huge game changer and is still accelerating. Having said that, the Ukraine war and supply chain issues are putting the brakes on some of the underlying trends. One example is Germany firing up its coal fired plants again,” says Hall. “The problem with climate change is that it is acute [in terms of visibility] when you have extreme weather events, but a sneaking long term effect overall. But the energy crisis is very here and now and hitting personal finances.”
Nonetheless, he believes “the resolution of the energy crisis and climate change have a lot of overlap” and that operators can play an important role in helping to drive wider societal change. “Energy supply is not reliant on fossil fuels. That’s what I think we all need to remember,” he says.
Lear more here about how TM Forum supports its members in enabling sustainability impact across the telecoms industry.