Eltek is a leading hybrid telecom power manufacturer with 60 offices worldwide. Eltek’s product portfolio includes hybrid energy solutions focused on opex reduction, supported by a zero capex financing deals. Eltek have 4,000 hybrid sites deployed, and are currently bidding for a further $100m worth of hybrid solutions. TowerXchange spoke to Eltek’s Middle East and Africa Regional Director Bob Hurley and his colleague Younis Shan, who focuses on West Africa and who had previously worked at Helios Towers Nigeria.
TowerXchange: Tell us about the current state of hybrid power at cell sites in Africa.
Bob Hurley, Regional Director MEA, Eltek:
Around 10% of African cell sites use hybrid energy, and most of those have been fitted in the last two years. Diesel generators run 24/7 on many sites and that leads to inefficiency in terms of maintenance, site visits and generator renewals. With hybrid energy solutions, you might be able to cut run time to six hours per day, reducing diesel consumption by 70-75% while reducing maintenance site visits. You’re then able to run the generator at a much more efficient load – typically they might be running at 20%, we can make it more like 70% with systems that simply switch it off except when it’s most efficient to do so.
TowerXchange: If 10% of cell sites in Africa use hybrid or use pure renewable energy, what’s the balance between CDC battery hybrid, solar, wind and fuel cells, and what in you opinion are the relative merits of each?
Bob Hurley, Regional Director MEA, Eltek:
CDC battery hybrid are the most popular hybrids. I’d estimate that out of all the hybrid and renewable powered cell sites in Africa, probably 60% have got as far as investing in CDC, 30% have added renewables to become a full hybrid, and maybe 10% are pure solar.
The quickest way to reduce energy opex is to put in a bigger cyclic battery to enable the battery to run longer than the DG. In a number of cases we’re deploying CDC solutions that are solar-ready so the tower operator doesn’t have to rebuild the cabinet if they choose to add solar panels and chargers.
Another option is pure solar off-grid sites consisting of a cabinet with a solar charger and a cyclic battery. They might be 1-1.5 kW sites, usually in rural areas.
Younis Shan, Regional Sales Director, Eltek West Africa:
Solar isn’t very common in West Africa, given the cost, and size of power required for a 2.5kW base station.
Of their 3,500 cell sites, Etisalat in Nigeria have 460 hybrid sites, all of which are battery hybrids. Some of those sites are totally off-grid, some have 4-6 hours of non-continuous grid power a day. The battery hybrids are realising 50% savings.
Bob Hurley, Regional Director MEA, Eltek:
Wind is experimental at this stage. RoI can be five to six years because of the cost of the tower, turbine and interconnection with the telecoms system. The cost of turbines needs to come down, and there needs to be more commonality across the turbine manufacturers – each has their own system, dump load, and method of converting rotating power to static DC or AC to input into system. Operators tend to look for RoI in less than two years, so people are dabbling with wind power, but there’s no great penetration in the telecoms market.
Fuel cell solutions usually run on a gas, so you have the logistical cost to get that gas to the site, or you need to source a local supply to make it cost effective. So the running cost may be similar to using diesel as you’ve still got to top-up and monitor consumption. The upside to gas is it’s less stealable than diesel.
TowerXchange: Has the entry into the market of low-cost manufacturers meant that off-grid solar cell sites are becoming somewhat commoditised?
Bob Hurley, Regional Director MEA, Eltek:
There is a price band which operators find acceptable. The capex requirements of pure solar sites is driven by the cost of solar panels, and that has come down significantly to perhaps a third to half what they cost four years ago. That improves the timeline to RoI in solar.
I don’t think it’s a commoditised market. One of Eltek’s key focuses is to be technologically ambitious. Technology plays an important part in which vendor is given these sites – it’s not just about price, it’s about performance too. We deploy a complete solution – we seek to understand and resolve at operational issues, not just provide a black box. A well chosen controller will look at performance of batteries, generators and solar panels to tell the operator where they’re getting the most efficient usage.
TowerXchange: How do operators prioritise at which sites to invest in hybrid power solutions?
Bob Hurley, Regional Director MEA, Eltek:
Operators often make pragmatic decisions about investing in solar at big sites that have tri-site coverage – if one site goes down and the majority of subscribers can be picked up by an over-lapping BTS, they might not invest in hybrid energy. Of course that changes if it’s a backhaul or backbone site they can’t afford to drop.
Operators might use multi-site monitoring to look at performance within an area or group of perhaps twenty sites to identify the right technology to invest in, and at which location they’ll get the most out of it. On that basis they might select five sites for solar and five for CDC batteries.
TowerXchange: How do you design a greenfield site to maximise energy opex efficiency?
Bob Hurley, Regional Director MEA, Eltek:
At greenfield sites the first thing to assess is grid availability and consistency. If it’s an off-grid or unreliable grid site requiring significant generator runtime, you need to asses how big the site is, how key that site is in terms backhaul, transmission and subscribers served, and any overlap with other base stations that can pick up subscribers if the site goes down.
How much power is required? Can you get away with simply buying a bigger cyclic battery and accept you will have some diesel cost (and diesel theft risk), or is the site important enough to invest in solar? Other considerations might include noise from running the DG and carbon emissions. It’s all about finding the best fit, the least capex for the most efficiency. Is it worth investing $4,000 of capex on solar to keep a few subscribers happy if they have tri-site coverage and the majority will be picked up by an overlapping base station? That’s a commercial decision based on customer lifetime value and churn.
In our experience, full hybrid sites combining diesel, battery and solar power tend to only be deployed at key sites off the grid in Africa yet still serving lots of subscribers.
Younis Shan, Regional Sales Director, Eltek West Africa:
When it comes to greenfield site construction, smart companies are realising that it doesn’t cost much more to ensure a site is hybrid-ready – in comparison, retrofitting is expensive. That said, return on investment payback cycles for retrofitting to hybrid have fallen to 1.5-1.8 years as solar panels are getting cheaper.
TowerXchange: How do you futureproof a cell site so it’s energy efficient with just one tenant, but readily upgradeable to accommodate multiple tenants?
Younis Shan, Regional Sales Director, Eltek West Africa:
You need to have a modular approach to cell site power equipment. When you have a modular system, such as with your DC rectifier, you only buy what is required. Keeping a few empty slots means it only costs a few hundred dollars to upgrade compared to thousands of dollars to replace.
When a towerco acquires a site, they must find a balance between generator capacity and efficiency. Oversized generators need more diesel. You should also make sure your generator is sized initially for a maximum of two tenants; you can always move it to a newly acquired site if tenancy increases and more power is required.
On a co-location site, ensure that there is one centralised power system to serve multiple tenants – the previous co-location model was for each tenant to have their own power system due to decreases in lease rates it is now cost effective to have one outdoor centralised power system.
TowerXchange: Is it good news for energy equipment providers when towercos acquire assets from operators – do they stimulate investment in energy equipment upgrades to reduce opex, or do they just mess up your key points of contact?
Bob Hurley, Regional Director MEA, Eltek:
Many Mobile Network Operators are trying to get expensive, non-core network assets off their books, and are devolving to towercos the challenge of reducing Africa’s high opex. Towercos have a business model that requires investment in new batteries, generators and other technologies to drive down power costs and improve site level profitability.
Four years ago towercos were making good money, achieving leases of $7,000 per month for a gold package. In many cases rental rates have halved, so they need to find ways to further reduce opex
Where previously we maintained relationships with operators and their OEM partners, towercos have become equally important. Airtel have driven the model quite hard in India, where we have to sell to the towercos. Eltek has relationships with American Tower, Helios, Eaton and Airtel, but it varies country by country, even with the same towerco. For example in one country Alcatel-Lucent might be the OEM partner and they may be installing Eltek equipment, but in another country the same towerco might be working with an operator with a pre-existing relationship with Huawei, who don’t supply Eltek products.
TowerXchange: How can hybrid energy help towercos improve site level profitability?
Younis Shan, Regional Sales Director, Eltek West Africa:
Market dynamics have changed. Four years ago towercos were making good money, achieving leases of $7,000 per month for a gold package. In many cases rental rates have halved, so they need to find ways to further reduce opex. I believe towercos need hybrid power solutions to preserve their margins, unless they can guarantee tenancy ratios above two from the outset.
