Minimizing carbon intensity in telecom networks using TCO techniques. Author: Jesper Sjogren

1. Minimizing carbon
intensity in telecom
networks using TCO
techniques
ericsson white paper
284 23-3137 Uen Rev A | February 2010
Authors: Ericsson Jesper Sjogren

2. 2
TCO2
• A GROWING CHALLENGE
Climate change is one of the most compelling global challenges of our time. Compared to other sectors
such as travel and transport, buildings and energy production, the ICT sector is relatively energy-lean,
responsible for about 2 percent of global energy use and subsequent carbon emissions (with telecom
representing just 0.6 percent).
While telecom is relatively energy-lean, telecom networks are still energy-driven and energy costs
represent a significant opex item that is increasingly important as energy prices rise and energy efficiency
continues to be in focus. The challenge for operators is to pursue growth in telecom networks, while
ensuring the 2 percent of global emissions does not significantly increase over the coming years.
This environmental challenge cannot be met in a static commercial or operating landscape. New
technologies and applications are driving growth in both mobile and fixed broadband data networks.
These networks are expanding to serve more subscribers and increasing traffic per subscriber. From
an environmental perspective, this means that while the absolute amount of energy consumed by
telecom networks is growing – along with associated CO2
e emissions – the carbon intensity of the
network traffic is lower than the activities the traffic replaces. The goal then is to increase energy
efficiency in driving additional traffic so the carbon intensity differential between that traffic and the
activities it replaces is as great as possible.
Due to the nature of networks, telecom operators need to employ a framework that not only includes
metrics to minimize carbon intensity, but also caters to network effects: the most efficient network
design draws together the maximum amount of traffic in the fewest nodes, given a set of constraints,
including transmission costs, spectrum limitations, radio link budgets and/or optical limits.
Each of the elements in an operator’s cost structure has an associated environmental impact.
Traditionally, this impact has been given relatively little consideration by operators when making network
investment decisions. Additionally, a methodology has not been in place for operators to understand
cost and environmental dimensions simultaneously.
There are many investment trade-offs to be studied along the way, and the approach that allows
these to be investigated in the most straightforward way isTCO. By linking CO2
e and associated cost
evolution estimates into theTCO framework, an operator has a powerful tool to use when considering
alternative network designs and power-saving features, evaluating traffic enhancements and minimizing
environmental impact while improving competitiveness.
Authors: Ericsson Jesper Sjogren

3. 3
TCO2
• A TOTAL APPROACH
In addition to cost-effective operations, operators are also recognizing the need to respond to the
climate change challenge by reducing the environmental impact of their operations.
Life-cycle assessment (LCA) is the most complete methodology used when a company is considering
its carbon footprint – in other words, its complete impact on CO2
e emissions. For telecom equipment, the
LCA framework includes carbon impacts from raw materials, manufacturing, transport and operations
until it is decommissioned and disposed of.
In the future, operators will need to find ways to balance investment decision-making so that it
is based on both economic and environmental grounds. The approach can be referred to as TCO2
,
and it can help telecom players
lower costs while simultaneously
reducing their carbon footprint.
LCA studies indicate that
more than two-thirds of all CO2
e
emissions associated with network
equipment during its lifetime
are attributed to its operation.
The TCO2
approach focuses
specifically on network operations
and efficiency gains that will lower
the carbon impact.
Today,TCO and CO2
e emissions
associatedwithnetworkoperations
are the primary focus for operators.
Operators, however, will need to
make investment decisions in the
long term that consider the total cost and total CO2
e impacts.
Telecom operators can use theTCO2
methodology in network operations to evaluate carbon emission
and energy consumption savings from different solutions and network scenarios.
When an operator is building a network – or rolling out more capacity or coverage – there are choices
and trade-offs to evaluate in designing and implementing the solution. When the issues primarily
involve costs, then TCO is an
effective framework to use when
evaluating different options.
TCO is useful when evaluating
two or more solutions that result
in the same potential to generate
revenues: in other words, build one
way and the annual cost structure
will be A, or build another way
and the cost structure will be B.
Both cases can have the same
revenue-generating potential, but
the profits and cash flows will differ
depending on the efficiency of
the implementation.
The cost mapping shown in
Figure 2 outlines a categorization
of annual costs in an operator’s
income statement. All capital
expenditures have been converted
Figure 1: The TCO2
model
Figure 2: A network operator’s cost structure
Authors: Ericsson Jesper Sjogren

4. 4
TCO2
• A TOTAL APPROACH
to depreciation, which is useful
when making comparisons
and trade-offs between
annual operating costs and
investment costs.
Business-driven costs are
thosedrivenbytherelationships
between the operator and
its customers, and between
the operator and other
operators (as well as corporate
overheads). The result of the
operator’s decisions relating
to its dealings with customers
and other operators can be expressed in terms of traffic, which is met with a given level of coverage,
capacity and quality. The operator must make decisions on how to build and operate a network to
fulfill those demands.The costs related to that demand fulfillment are network-driven, and these costs
are the object of the analysis.
The model illustrated in Figure 3 is used to calculate alternative scenarios in order to make
a cost comparison of dimensioning and building the network in different ways. TCO is used to
form an understanding of the cost dynamics (trade-offs) of employing a particular set of features or
design methods.
The result can be expressed in a number of ways. In addition to showing it as an absolute number,
it can also be divided by capacity or coverage, or the number of subscribers served by the underlying
network.This can result in a number of useful metrics:TCO per Erlang, megabyte (MB) served, square
kilometers (km2
) of coverage, and/or per subscriber.
Environmental impacts, CO2
e and carbon intensity also need to be calculated with the costs for
each scenario. The energy consumed, in terms of annual kilowatt hours (kWh), can be multiplied by
a carbon intensity figure for the power mix supplied by the electricity grid (metric tons of equivalent
carbon dioxide per megawatt hour or MTCO2
e/MWh) giving an amount of CO2
e for each scenario. Any
other operationally related CO2
e amount should be added to these figures. This includes any CO2
e
emitted by locally produced power, as well as figures from maintenance vehicles.
The sum total CO2
e for each scenario can be related to network traffic in terms of Erlangs, megabytes
of data per subscriber or per revenue unit to arrive at carbon intensity.
ENERGY EFFICIENCY
The TCO framework – along with associated carbon intensity figures – can be applied when minimizing
environmental impact. In a landscape of growing subscriber numbers and traffic, this means maximizing
the energy efficiency and minimizing the CO2
e costs of the delivered traffic. The approach is used in
a stepwise fashion starting with network design, which explores alternative ways to build a network
with the required coverage, capacity and quality, and which has the least environmental impact and
demands the fewest physical resources.
Figure 3: The TCO model
Authors: Ericsson Jesper Sjogren

5. 5
TCO2
• A TOTAL APPROACH
This approach is not limited
to “greenfield” network build-
outs,thoughthatiswherethebiggest
savingscanbemade.Italsoappliesto
capacity expansions, modernization,
network transformation and new
service offerings.
When designing and deploying
networks a key distinction should
be made between static and
dynamic power demands.
All electronic telecom equipment
consumes power when it is
switched on. Power supplies, basic
operating functions and signaling
between nodes (and in the case
of mobile communications,
between radio base stations
and mobile handsets) consume
power even when the network is
not carrying any traffic. In broad
terms, power-saving features
are designed to lower this static
power consumption. There are
many features today that monitor
network activity and successively
power down unneeded equipment
during times of low traffic without
degrading quality of service.
A significant portion of power
consumed by a network can be
termed “dynamic,” as it varies in
direct relationship with the amount
of traffic being handled in a network
at a given time. This portion of the
power consumption can be made more efficient – that is, more traffic can be handled with a given
amount of energy – by employing capacity-enhancing features. Most network equipment vendors have a
range of features designed to deliver more traffic through a given network.The effect of employing these
features is that less power is needed
for any unit of traffic. In growing
networks it is both cost effective and
environmentally friendly to deploy
as many capacity enhancements
as possible before adding more
sites or nodes. Examples of such
features are the use of AMR-HR
in mobile voice networks, and of
higher-order modulation schemes
for data transmission. Figure 4 is a
conceptual illustration of the way in
which energy efficiency is increased
through the use of a capacity-
enhancing feature.
Once all capacity-enhancing
features have been considered,
the next task in the step-by-step
approach is to consider power
solutions at the site and node level.
EFFICIENCY OPTIONS
Operators focusing on the efficiency of their existing networks, have various options.
Three of these are:
• modernizing and optimizing networks, including upgrading to energy-efficient network
hardware as part of network evolution, and reducing energy consumption in the installed
base by using energy-reducing software and capacity-enhancing features
• sharing assets and resources to leverage economies of scale and reduce CO2
from
higher utilization of assets and resources (by sharing operational resources, passive or
full network operators can substantially lower costs and environmental impact)
• changing the energy mix by supplying the network with less carbon-intensive energy
sources from the electrical grid, or by directly investing in renewable energy sources
such as solar and wind powered radio sites.
Operators must choose the best combination of these investment options to support their
business objectives.
Figure 4: Enabling energy-efficient growth through capacity enhancements
Authors: Ericsson Jesper Sjogren

6. 66
TCO2
• CONCLUSION
Exploring power on a site level is critical in developing regions, where many sites do not have
access to the electricity grid, or the grid supply is unstable. In such places, it is common to employ
diesel gensets to supply power locally. In these cases, it is especially useful to use theTCO2
approach
to optimize both costs and CO2
e emissions on the site level. Here there are many trade-offs to be
considered. For example:
• raising the allowable operating temperature on site wherever possible to lower the cooling
requirements, and lead to the use of smaller diesel gensets and to the associated reduction in fuel
consumption and CO2
e emissions
• adding appropriate battery capacity on site and regularly cycling the batteries to significantly
reduce genset running hours (both directly reducing CO2
e emissions, and indirectly by minimizing
field maintenance visits)
• using wind and solar solutions to further reduce genset running hours and, consequently, diesel
consumption and associated CO2
e emissions.
Note that each step under consideration entails a number of investments as well as savings.These
trade-offs can be thoroughly evaluated by using the TCO2
approach.
An additional area of potential savings, both in terms of costs and environmental impact – which is
specific to mobile networks – is network optimization. There are many network features and services
aimed at reducing interference and streamlining cell handovers, which are not immediately recognized
as contributing to energy efficiency.Their combined effect, though, is to maximize the amount of traffic
through a radio access network with a given amount of installed resources. Applying a TCO2
approach
to investments in these features and services generally indicates both an attractive cost trade-off
(versus adding more radio base station capacity) and better CO2
e emissions metrics.
Finally, the area of shared resources provides a number of alternatives to further reduce costs
and environmental impact. Resource sharing encompasses a wide spectrum from outsourcing field
maintenance and network operations, to network sharing on a passive or active basis. Each step
along the continuum can mean savings in both cost and CO2
e emissions. Both savings are derived
from sharing resources with other operators.
TCO is a powerful tool for isolating and calculating the financial impacts of employing a solution or
set of features in a network build-out or capacity expansion.
Each of the elements in an operator’s cost structure also has an associated environmental impact.
Traditionally, this environmental impact has been given relatively little consideration by operators when
making network investment decisions. Additionally, a methodology has not been in place for operators
to understand cost and environmental dimensions simultaneously. The TCO2
approach provides this
methodology, resulting in an ideal framework to assess both financial and environmental impacts of
building and operating networks.
Authors: Ericsson Jesper Sjogren

7. 7
TCO2
• GLOSSARY, REFERENCES
AMR-HR Adaptive Multi-Rate – Half Rate: AMR was adopted as the standard speech codec
by 3GPP in October 1998, and is now widely used in GSM and UMTS
capex capital expenditure
carbon intensity the amount of CO2
e emitted per unit of activity, for example, kgCO2
e/kWh of electricity
produced, kgCO2
e/km driven, kgCO2
e/subscriber, kgCO2
e/Erlang or kgCO2
e/MB
CO2
e the concentration of CO2
that would cause the same level of radiative forcing as a
given type and concentration of greenhouse gas; examples of such greenhouse gases
are methane, perfluorocarbons and nitrous oxide
depreciation the reduction in the value of long-term assets over their useful life
Erlang a unit of traffic in a network equivalent to one voice hour
ICT information and communications technologies
LCA life cycle assessment
opex operational expenditure, a measure of recurring costs
TCO total cost of ownership
TCO2
total cost of ownership + CO2
e emissions
GeSi, SMART 2020: Enabling the low carbon economy in the information age, Global e-Sustainability
Initiative, 2008.
http://www.gesi.org/LinkClick.aspx?fileticket=tbp5WRTHUoY%3d&tabid=60
Measuring emissions right – assessing the climate-postive effects of ICT. Ericsson white paper,
December 2009
http://www.ericsson.com/technology/whitepapers/pdf/methodology_high2.pdf
Authors: Ericsson Jesper Sjogren