Mobile operators are often told that they must diversify their income streams and find new sources of revenue generation. Finnish operator Elisa thinks that one route is for operators to become power generators, using their battery storage facilities to reduce their own power costs and to make money by selling energy to national grids.
The company is publicising an approach it calls Distributed Energy Storage, which uses smart management of cell site battery backups to create a Virtual Power Plant within the RAN. Elisa says its DES is already operational across 200 sites in Finland following trials in 2022, with plans to extend that to all 2,000 of its sites in Finland by 2025.
The basic theory is as follows. We’re already seeing a lot of solar and wind energy in the energy generation mix, but we’re going to see a lot more if Governments and businesses are to meet current climate change targets. This comes with a problem. Wind and solar power generation can be unpredictable – too much at windy or sunny times and not enough when it’s calm and dark.
That creates both supply and price volatility.
Balancing this out will require a lot more flexibility of supply, which Elisa says can be supplied by battery storage units connected to power grids – so that when wind turbines and solar panels are generating more energy than is required excess energy can first be stored and then released back to the grid when it is needed. This will also reduce the waste of curtailment, where wind power generation is limited and therefore “wasted” because turbines are producing too much power.
Elisa’s “conservative estimate” is that the combination of cost savings and revenue opportunities add up to more than half an operator’s current electricity spend, something it calls “a huge opportunity”.
Elisa thinks that mobile network operators could be the ideal businesses to host that battery storage capability that captures renewable energy. They can then either use the energy where it is needed within their own networks, exploiting intelligent load balancing technology, or sell it back to national energy providers. Elisa’s AI-powered DES solution also enables ‘load shifting,’ purchasing electricity during low-cost periods and storing it for use or sale during peak demand.
A new white paper from Elisa points out that many operators are already mandated to install battery back up at cell sites, making the Radio Access Network (RAN) a natural place to look for an energy storage solution. It said that historically, the telecommunications industry has been the world’s second largest user of batteries with many operators depending on battery storage to provide back-up.
The paper says, “As providers of critical infrastructure, many operators are already mandated to maintain an alternative energy supply to ensure service in the event of disruption.
“Much of that is provided by battery power. With an upgrade to lithium-ion batteries and the application of the DES smart management solution, the RAN can be turned into a Virtual Power Plant (VPP) capable of optimising energy consumption in the network and providing balancing services to grids.
“The pilot programs we’ve run in our own networks in both Finland and Estonia have proven the solution can not only deliver on its sustainability promise, reducing our emissions, but can also help to cut Opex and generate revenues.”
Elisa’s “conservative estimate” is that the combination of cost savings and revenue opportunities add up to more than half an operator’s current electricity spend, something it calls “a huge opportunity”.
Elisa adds that more flexible storage could also help smooth out price volatility. The way in which many electricity markets work with a ‘marginal pricing methodology’ means that grid managers buy from those sources that are cheapest from the marginal cost perspective first. A market structure combining marginal pricing with intermittent sources can lead to temporary pricing peaks as cheaper renewable sources go offline. That can be mitigated however by the provision of flexible resources such as batteries and other demand responses that can balance production and consumption.
How Elisa’s DES works:
DES requires up front investment for operators in swapping out older lead acid batteries for lithium-ion models that improve storage and provide greater longevity. Across its 200 site trial, Elisa said it created a Virtual Power Plant of about 1 MW capacity.
As well as being more efficient, the lithium-ion batteres can provide useful data about performance. Elisa set up a communication system between its rectifiers and battery management system that provides it with a lot of actionable intelligence and data.
It also added a smart management system, designed as three layers of control intelligence powered by AI software. A top-level planner uses supply and demand data of different electricity balance markets to perform thousands of simulations that allow it to determine how much capacity to allocate at any given time to load-shifting or grid balancing. A middle layer supervises the flow of electricity and conditions of the base station power equipment. The lowest level controller selects which specific units should be adjusted to respond to changes in load-shifting plans or to TSO grid balancing requests.
Elisa’s current focus is to adapt the AI/ML control to allow it to be installed with other operators’ critical infrastructure. Further technical work is underway to ensure compatibility in the widest possible multi-vendor environment, for power and battery hardware.
“For the first time, we had a unified and real-time view of our power supply situation across the whole network, which is obviously very useful for our business and performance. It also opens a new avenue for potential services, one of which is the network facilitating the creation of a Virtual Power Plant, using the DES solution,” said Ismo Räsänen, Senior Development Manager, Elisa Oyj.
The mobile operator must also be approved as a supplier by a grid operator. In Finland, following a trial in the summer of 2022 of 200 base Elisa stations across the country Elisa received the technical pre-qualification acceptance from Fingrid (Finland’s Transmission System Operator or TSO) for its Distributed Energy Storage solution to provide balancing services in a specific balancing market, the “automatic frequency restoration reserve”, or ‘aFRR’. It is believed that this is the first time anywhere in the world that a distributed solution has been approved for the aFRR market which are normally served from hydropower or natural gas plants.
The commercial model for the DES system is operated in a partnership between the two parties with Elisa providing the solution, the customer the controllable assets and infrastructure.
Returns:
Elisa said that the load-balancing alone is sufficient to support the business case, and the payback time on the investment is approximately five years – even with energy prices having fallen from the historic high in 2022.
As the graphs below shows, Elisa has modelled the savings and revenue from a 200 site VPP, using data from its won trials. Montlhly revenues from the aFR marketrange from EUR30-60,000. In fact, Elisa itself thinks it will see ROI on its own investment within three years. It also thinks it will result in annual reductions of up to 20,000 tonnes of CO2 when fully deployed.
