Green Bonds, Carbon Trading Key To Telecom’s Sustainability Goals: DIPA

Digital Infrastructure Providers Association (DIPA) is at the forefront of India's telecom transformation, championing sustainability and digital inclusion. “The telecom sector is already carbon-negative and a key enabler of zero-carbon goals through digitisation,” says Manoj Kumar Singh, Director General, DIPA, in an exclusive conversation with Bizz Buzz.

He highlights how telecom companies are reducing emissions by adopting green energy solutions, with diesel-free sites rising from 90,911 in 2016 to 223,177 in 2024. Leading operators like Bharti Airtel and Reliance Jio are setting ambitious targets, aiming for over 50 per cent emission reductions by 2031. However, financing remains a challenge, requiring innovative solutions like green bonds and carbon credit trading. With government support and policy reforms such as Green Energy Open Access, the industry is poised to balance network expansion with sustainability, ensuring a greener digital future

How will telecom companies balance the immediate need for network expansion with long-term sustainability goals? What innovative financing models could help bridge this gap?

Telecom landscape is already a carbon-negative industry and a critical enabler of zero-carbon goals through digitisation. By driving digital solutions like e-health, e-education, e-banking and among others, the telecom sector helps various industries significantly reduce their carbon footprints. This shift minimizes travel, reduces paper usage, and streamlines operations, resulting in substantial emission reductions.

Contributing 6.5 per cent to the national GDP, it is projected to reach a market value of $69.62 billion by 2029. With over 8.14 lakh towers and 29.43 lakh base transceiver stations, providing 99 per cent 4G coverage, this infrastructure significantly contributes to the national carbon footprint, accounting for about 9 per cent of emissions.

Leading telecom operators have already adopted sustainability goals. Bharti Airtel plans to reduce Scope 1 and 2 emissions by 50.2 per cent by 2031, and Reliance Jio aims for a 76 per cent reduction by 2028. The transition is underway, with tower sites adopting solar power, growing from 4-5 kW systems to 10 kW for 4G/5G. Diesel-free sites reached 223,177 by March 2024, compared to 90,911 in December 2016, saving 550 million liters of diesel annually.

Despite progress, financing challenges remain. Upfront investments in renewable energy and energy-efficient technologies are substantial, requiring innovative financing models. These could include:

♦ Issuing bonds to attract eco-conscious investors for green initiatives.

♦ Collaborative funding for renewable energy and energy-efficient projects.

♦ Carbon Credit Trading: Monetizing environmental improvements to offset costs.

♦ Equipment Leasing: Allowing companies to access energy-efficient tech without high upfront costs.

♦ Multilateral Development Funding: Low-interest financing from international organizations for sustainable projects.

Supportive regulatory frameworks are essential. The Green Energy Open Access (GEOA) policy illustrates how regulatory support can facilitate sustainable development. Telecom companies must view sustainability as an investment, ensuring operational efficiency and competitiveness.

Can the digital infrastructure sector leverage green energy solutions to create truly sustainable smart cities without compromising on service quality?

The integration of green energy solutions into India’s digital infrastructure can power sustainable smart cities while maintaining service quality. Telecom operators have proven that renewable energy can reliably support critical infrastructure. Operators must maintain network availability above 99.5 per cent, even while transitioning to renewable energy. The increase in diesel-free sites—from 90,911 in December 2016 to 223,177 by March 2024—shows that renewable energy can power telecom operations effectively.

With 41.9 lakh kilometers of fiber optic coverage and 85.43 per cent tele-density, India's digital infrastructure supports smart city initiatives where 7380 projects have been integrated Rs. 1,47,704 Crores. The GEOA policy enables access to renewable energy, with 24 states already adopting it, helping build sustainable urban infrastructure.

More and more use of integrated (multi-utility) street furniture for digital infrastructure will be the need of the hour to maintain the city skyline, an area where telecom infrastructure players have been highly focused. These integrated structures support the deployment of small cells, Wi-Fi hotspots, and EV charging stations, blending seamlessly into urban landscapes while enhancing network capacity.

What role should government incentives play in accelerating the adoption of renewable energy solutions in the telecom sector?

Government support is crucial in accelerating the telecom sector’s transition to renewable energy. Existing initiatives like the Ministry of Power's Gazette Notification, allowing load aggregation for Green Open Access Energy, and the National Digital Communications Policy 2018, which promotes alternative energy sources, lay a strong foundation. These policies encourage R&D and carbon emission reduction.

The government also provides incentives like exemptions for offshore wind energy users and support from the Department of Telecom (DoT) and the National Broadband Mission. Key measures needed to enhance adoption include:

♦ Tariff Restructuring: Classifying telecom infrastructure under industrial rather than commercial rates for renewable energy.

♦ Infrastructure Development Support: Expediting power connection processes for telecom towers.

♦ R&D Funding: Supporting innovation in renewable energy technologies.

The government must create an enabling environment by streamlining regulatory processes, offering technical guidance, and promoting stakeholder collaboration.

How will the implementation of GEOA impact smaller telecom players, and what measures can ensure equitable access to green energy resources?

The GEOA policy’s recent amendment allows telecom companies to aggregate demand across multiple connections, helping smaller operators meet the 100 kW threshold. However, challenges remain, particularly regarding the substantial upfront investment for renewable energy infrastructure and energy storage solutions.

To support smaller operators, measures should include:

♦ Financial Support: Public-private partnerships and funding programs for renewable energy adoption.

♦ Technical Support: Capacity-building programs to assist smaller operators with system design, installation, and maintenance.

♦ Shared Infrastructure Models: Extending tower-sharing models to renewable energy infrastructure, helping smaller operators benefit from economies of scale.

The government's initiative to provide Rs 4,950 crore for net meter availability is a positive step toward supporting smaller telecom players.

With the increasing energy demands of 5G and future technologies, how can the sector ensure its green initiatives keep pace with technological advancement?

The rollout of 5G networks presents both challenges and opportunities for sustainability. 5G requires three times the number of base stations compared to LTE, but its energy efficiency per unit of data transmitted is greater than older networks. Network modernization and technology innovation are critical to managing this balance.

Operators like Bharti Airtel and Reliance Jio are phasing out less efficient networks, and the adoption of energy-efficient hardware and AI-powered power management systems is helping improve energy use. The industry is also expanding renewable energy capacity, with Reliance Jio investing 161 MW of solar power across 17,000 sites.

To ensure green initiatives keep pace with technological advancement, the industry must invest in:

♦ Advanced Energy Storage Solutions: Supporting renewable energy integration.

♦ Efficient Cooling Systems: Reducing energy use in network equipment.

♦ Smart Grid Technologies: Optimizing power management.

♦ Emerging Technologies: Exploring hydrogen fuel cells for backup power.

Government policies like the State EB Tariff Order, which may classify telecom electricity tariffs under industrial rates, and the introduction of smart electricity meters are crucial for supporting the sector’s sustainability efforts.

In conclusion, telecom companies must balance the demands of expanding infrastructure with the need for sustainable operations. The industry’s transition to renewable energy, coupled with innovative financing models and government support, is key to achieving long-term environmental goals while advancing technological progress.