Cost-out in the great outdoors
Scott t. Ebert
The result of this upheaval? It could be substantial cost savings.
The drama is unfolding in the area of backup power. As networks expand at an eye-opening rate—with reliability requirements still deep into the nines—planners are scrambling to optimize their infrastructures while holding the line on cost. That means distributing backup power closer to the need: that is, next to cell towers and other outdoor equipment.
Unfortunately, the tried-and-true backup technologies, which worked so well in the central switching office, fall short in the field. Valve-regulated lead acid (VRLA) batteries are proving sensitive to temperature, short-lived, too heavy for many outdoor applications and laden with environmental issues. Engine-generator sets produce combustion emissions and unacceptable levels of noise.
Then there’s the cost picture. Preventative maintenance gets cost-prohibitive very quickly with a large number of sites, and the traditional technologies require frequent maintenance. VRLA batteries also incur substantial expense at disposal time. All these costs could eventually neutralize the initial price advantage that VRLA has long held over competitors. And that advantage will diminish even further as alternative technologies become more cost-efficient.
Several of the alternatives — including some within the battery family — have already emerged as potential contenders for backup power in the outside plant. Notable among them are lithium-ion batteries, which fulfill many outdoor requirements. For instance, they have expected lifetimes of more than 10 years in extreme environments. They offer substantial weight and space savings over VRLA batteries.
Unfortunately, those distinct advantages come with significant disadvantages — and chief among them is cost. Currently at five to seven times the expense of VRLA, lithium-ion batteries require a much higher initial outlay than many service providers are prepared to make. As with other innovations, cost will come down as the technology matures, but providers are under pressure to come up with solutions now.
Another alternative – stationary fuel cells – circumvents battery technology altogether. In the proton exchange membrane (PEM) version, hydrogen fuel is converted directly to DC power, heat and water. Here the cost picture is considerably brighter. Preventative maintenance is expected only every three years. Initial unit cost runs roughly one-third to one-fourth that of lithium-ion batteries. While still more expensive than VRLA batteries, fuel cells have a much longer useful life and fewer maintenance needs; what’s more, remanufacturing practices employed in many fuel cell companies have vastly reduced disposal issues. Bottom line: lower life cycle cost.
How much lower? Right now, most of the savings come over the long haul. In a conservative scenario, each fuel cell can save its owner $8 000-$10 000 off the total cost of a VRLA battery in 10 years. Several variables can shorten that time frame: VRLA batteries in hot climates, for instance, have only half the life of their northern counterparts in cooler climates, making fuel cells more cost-effective in areas that experience extreme heat.
The overall cost advantage will undoubtedly grow, thanks to a concerted effort by the stationary fuel cell industry to drive cost out of its products. Plug Power, to cite just one example, has lowered its direct material cost by double digits year over year, and is on target to drive out an additional 10 percent over 2004 levels in 2005. Continual research and development has boosted operating efficiency and system lifespan.
Along with lower costs is an advantage with huge implications for telecom marketing: reliability. The extended run time of fuel cells (greater than 12 hours, limited only by fuel supply, versus a VRLA battery’s two to eight hours) enables them to maintain reliable network operation far longer during extended outages. Given subscribers’ demand for constant uptime, the reliability generated by fuel cells provides a key point of differentiation in a fiercely competitive marketplace. Of course, such a differentiator can also help providers win the retention battle; this becomes especially important as the cost of acquiring each new subscriber reaches $300-$400.
The entire cost picture is viable only because fuel cells are particularly adaptable to the great outdoors. Plug Power’s line of backup fuel cell systems, GenCore®, is designed for reliable operation from –40C to 46C. The light weight and small footprint make it suitable for rooftop locations. The clean process produces zero emissions and little noise. The system provides immediate—and, as necessary, extended — response to power interruptions.
Small wonder, then, that fuel cells have already generated considerable interest among service providers large and small. More than 125 GenCore units are already deployed in the field. Several major telecoms are actively field testing fuel cell technology and planning to use it in their future infrastructure strategies. In developing their plans, they may have taken their cue from several notable successes:
What happens next? As implied earlier, both fuel cells and their battery counterparts will continue to see further development, driving down costs while expanding features. Each technology has its challenges, of course: fuel cell manufacturers, for instance, are collaborating with service providers to work out the logistics of fuel supply. Because the needs and challenges are so varied, many of these technologies are likely to take their place in a mosaic of backup power solutions. Their use will undoubtedly expand into other applications, like broadband and uninterruptible power supply.
Even now, telecoms and wireless companies are finding cost savings for their backup power in the outside plant. Fuel cells in particular may hold the key to everyone’s favorite formula: reliable service and lower costs. Maybe providers can have it both ways after all.
This report was first published in Energy in Africa Magazine, November 2005 - January 2006. To subscribe click
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