Off-the-Grid Cell Phone Networks, Seek the Sun, Wind

ericssonsolarbasestationCell phone companies are by no means racing to use renewable sources of energy, such as solar and wind, to power the infrastructure that runs their wireless networks. Of the more than 4 million cellular base stations deployed world wide, less than 2,000 run on clean power, so just a fraction of a percent are using renewables, Allen Nogee, Principal Analyst for market research firm In-Stat tell us. But there is still a green trend taking shape: in developing countries where there is little or no grid access, cell phone companies are starting to find that in certain situations, solar and wind powered base stations can save them money compared to off-grid diesel-powered base stations.

According to In-Stat by 2014, there will be over 230,000 cell phone base stations powered by solar and wind in developing countries in Africa, South East Asia, South America, Latin America and the Caribbean. Ericsson (s ERIC) said last year that it has provided 200 solar-powered base stations around Africa and South East Asia. Those are the same markets that will see some significant growth over the next 5 years, and In-Stat predicts that the number of off-grid base stations is growing at 30 percent per year.

Those numbers are still small — 230,000 of what will be much more than 4 million base stations by 2014 is tiny. But that’s because cell phone operators will only deploy solar and wind powered base stations where it makes economic sense. Nogee says that clean power base stations need to have a return on investment of no longer than 3-5 years compared to the recurring costs of buying diesel to power generators.

A lot goes into that return on investment equation. One of the biggest is that as diesel-powered base stations are placed further off the grid and farther away from urban centers, the cost to power them rises as a result of higher transportation costs. Therefore you’re more likely to see solar and wind powered base stations way off in the middle of nowhere.

Other factors that cell phone operators need to consider are: the amount of wind and sun readily available at the location, the cost to bring the materials and labor to the site and get the clean power base station built, the cost of diesel fuel in the area, and the prevalence of people stealing diesel fuel (easily stolen and easily reused). That last one might seem surprising but in remote locations it can cost an operator millions of dollars to both monitor a base station and lose fuel from it to theft.

Mostly the companies who are developing this technology are the very large base station manufacturers that already have contracts with wireless operators in developing countries, including Huawei, Nokia Siemens, Ericsson, and Alcatel-Lucent (s ALU).

Image courtesy of Ericsson.