Telco energy use flatlines in 2023; green energy’s share of total creeps up to 20%

That involves scouring over 60 sustainability reports. For people who accept that climate change is a serious immediate threat, there is good news and bad. One bit of good news: total energy consumption declined by about 1% versus 2022, to approximately 330.5 Terawatt hours. That follows three straight years of roughly 4% annual growth.

The mild dip in 2023 is due to three factors: a growing telco focus on energy efficiency in making procurement decisions; telcos’ ongoing efforts to spin off portions of their physical plant; and, weak telco revenue growth. The improvement in energy efficiency is crucial, and clearly positive; vendors have been working hard to deliver these gains. The other two factors are more complicated. If energy demand is falling because telcos are spinning off physical assets, that is not necessarily a good thing; the asset buyers (carrier-neutral operators, in particular) are often even less committed to carbon neutral policies than telco. Lower energy consumption due to weak revenues is also a mixed bag. Ideally we all want telecom to start growing again, instead of remaining mired in the 0-2% annual revenue growth territory.

More good news: green energy continues growing as a share of total telco energy use. It reached 19.9% in 2023, from 10.3% in 2019. Figure 1 shows total energy consumption in the global telco sector and the % renewable energy, from 2019-2023.

Source: MTN Consulting (www.mtn-c.com)
*Including offsets from purchase of renewable energy certificates or the equivalent

Modest gains have been made each year, with Europe leading the charge. Eight of the 10 telcos with the highest percentage use of green energy are based in Europe: Deutsche Telekom tops the list with 100%, including offsets for renewable energy credits, followed by Tele2 and Telia at about 95% each. The non-European telcos in the top 10 are Turkcell (94%) and Quebecor (85%). Canadian telco Quebecor has been aggressive on green energy for many years, but it’s a new trend for Turkcell. Since 2021, Turkcell has purchased all of its electrical energy from certified renewable energy producers and also increased its own self-generation of renewables through wind and solar investments.

While Europe is in the lead, China lags. Energy consumption by China’s three telcos continues to outpace the rest of the globe. That pushed China to nearly 35% of global telco energy use in 2023, versus just 16% of revenues. More importantly, China has only recently begun serious investments in renewable energy. Green energy as a share of total in China was virtually zero prior to 2023, for telcos. Figure 2 shows renewable energy use in China versus rest of world (Global ex-China), for 2019-23.

Figure 2: Telco shift to renewable* energy: China vs. Rest of World

Source: MTN Consulting (www.mtn-c.com)
*Including offsets from purchase of renewable energy certificates or the equivalent

In the neutral news department, the so-called “energy intensity” metric is stable. Across the telco sector overall, energy consumed in MWh per $1M in revenue was 186 in 2023, from 187 the prior year. The slight decline is positive, but 186 is still much higher than the 163 MWh/$M result from 2019, when we started tracking the topic. Ideally, we would see energy intensity fall over time: telcos are not investing heavily in data centers, are spinning off some network assets, and vendors are working hard to deliver gains in energy efficiency of individual pieces of the network.

When it comes to the US, it is already behind the curve. US-based telcos have been slow to invest in green energy. The most aggressive is Windstream, at 35% green energy in 2023. Verizon and AT&T reported 31% and 26% respectively, higher than the global average but well below similar telcos in other regions (excluding China). US-based cable telcos are the worst: Comcast’s green energy ratio in 2023 was 7%, while Charter Communications doesn’t report the data (we assume it’s zero). With the right wingers in charge again, these telcos will have more freedom of action and may even be penalized for certain “green” policies.

What about emissions? Energy consumption and green energy use are input metrics; we care more about actual emissions. First, let’s set aside scope 3 (value chain) emissions, as they remain controversial and are not universally reported. Let’s just focus on Scope 1 and 2. We estimate that telco Scope 1 and 2 (market-based) emissions (S1-2m) totaled to about 133 million metric tons of CO2 equivalent in 2023, roughly flat versus the prior three years when they averaged 136 million. So, there is no obvious downswing. Yet, becoming carbon neutral requires this to go to zero, and fairly rapidly. That is not happening. On a relative basis, S1-2m worked out to about 75 metric tons of CO2e per $1M in revenue in 2023. That ratio is roughly in line with the previous three years; again, there is no clear downtrend. The global telco sector should be leading, but it is just barely treading water.

Figure 3: Telco greenhouse gas emissions, Scope 1 and 2 (market-based*)

Source: MTN Consulting (www.mtn-c.com)
*Market-based scope 2 emissions account for purchase of renewable energy certificates or the equivalent