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Telcos, tower firms unwilling to carry burden of green norms in India

According to reports, the Union Government’s plans for powering telecom towers with renewable energy (RE) sources are not likely to be implemented smoothly.

The key problem is lack of renewable energy sources and tower companies do not want to invest in setting up a generation system. They suggest that the Government should ask renewable energy service companies to supply electricity, for which telecom companies can even consider paying a higher-than-normal price.

Telecom companies argue that they are unnecessarily being obligated to tap RE sources and bear the brunt of high investment and generation costs, and also take risks that come with generating green energy.

Mr Akshay Grover, Associate Vice-President – Telecom Practice, Ernst & Young, says that telecom companies should not be made liable because the Government is not able to supply electricity.  “Whether in the form of subsidies, or encouraging RE technology, or making RE companies viable, all of this has to be done and only then Government should expect telecom companies to comply with the guidelines.”

The Department of Telecom recently made it mandatory for telecom companies to use renewable sources of energy for powering their towers. Under the new rules, at least 50 per cent of towers and 20 per cent of the urban towers are to be powered by hybrid energy sources (renewable and grid) by 2015. The move is aimed at reducing carbon emissions due to increased dependence on diesel. Currently, over 65 per cent of a tower’s electricity requirement is met by diesel gensets.

Industry representatives say that while they are willing to meet the stipulated norms, telecom companies cannot take on the responsibility of energy generation. “Regardless of what the mode of generating electricity is, telecom companies pay the electricity board per unit used … and when this is the case, why can’t this be done with renewable energy companies?” an industry representative said.

An official of a large solar power company told Business Line recently that tower companies prefer to go on operational-expenditure model rather than capital-expenditure. In effect, telecom tower companies want someone to invest in setting up the infrastructure to supply energy while they can pay for the usage.

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