Rethinking Power

Backup in the 5G Era

For a greener, smarter, and more cost-
effective telecom network of the future
Table of Contents

03 Foreword – CEO, Polarium, Stefan Jansson

04 Executive Summary

06 Introduction: Climate Change and the 5G Era

06 The Hyperconnected World of the 5G Era
08 Climate Change and the New Energy Landscape

10 Five Reasons to Rethink Power Backup in the 5G Era

11 1. Keep Networks Up and Running
12 2. Lower Total Cost of Ownership
14 3. New Power Solutions for Denser Networks
16 4. Monetize Your Power Backups
– Cut Energy Cost and Open New Revenue Streams
19 5. Fight Climate Change

21 About Polarium

22 List of References

2
"It's Time for Mobile
Operators to Rethink
Power Backup"
We started Polarium in 2015 based on an idea. To use
our expertise in lithium-ion technology to empower a
smart and sustainable world. Because in the increas-
ingly connected world of the 5G era, connection can
never be lost. Simply put, the connected world needs
great power backup. And lots of it.

In parallel with an increasingly connected world, businesses and

policymakers all around the globe have come to realize that cli-
mate change is the number one challenge of our time. Innovation,
investment, and policy have spawned a surge in renewable ener-
gy – a must to decarbonize the energy system and fight climate
change. The intermittency of renewable energy has in turn creat-
ed huge demand for energy storage. In the coming 10 years, the
demand for lithium powered energy storage alone is expected to
grow by a factor of 22.1

This represents a great opportunity for forward thinking mobile

operators in the 5G era. It is time for mobile operators to rethink
power backup. From an insurance policy that is critical to have
but only used for a fraction of the time, to a vital tool in reducing
energy costs and fighting climate change.

By switching from unsustainable and costly lead acid batteries and diesel fuel
to lithium, your backup capacity can be turned into a much sought after en-
ergy storage asset. Lithium is not only a superior technology. From a backup
and TCO perspective, it can also be a part of the decentralized energy system
of the future, creating new opportunities for MNOs to optimize energy costs,
reduce carbon footprint, and open new revenue streams.

We put this paper together as a source of inspiration for mobile operators

who share our view that reducing carbon is not only a moral obligation to
future generations, but a business opportunity.

Sincerely
Stefan Jansson
CEO and Founder, Polarium

3
Executive Summary
The telecom networks of the 5G era need to be smarter,
greener, and more cost-effective. Today, power backups
are used as an insurance policy, critical to have, but
only used for a fraction of the time. However, power
backups could be a crucial part of the solution to the
challenges mobile operators face in the 5G era.

Five Reasons to Rethink Power Backup in the 5G Era

1. Keep Networks Up and Running: 5G networks rely on a constant power
supply to function. In the event of a 5G network failure, the entire
ecosystem of connected devices could collapse. Autonomous vehicles,
drones and other driverless types of technology would come to a
standstill, people could be locked out of their smart homes, and municipal
infrastructure could stop working. Large segments of society and the
economy could come to a halt. In the hyperconnected world of the 5G era,
connectivity must never be lost. For mobile network operators (MNOs) it
is imperative to have robust and reliable onsite power backup capacity. It
is high time for MNOs to switch from conventional lead acid batteries to
more reliable and predictable smart lithium power backup solutions.

2. Lower Total Cost of Ownership: The hyperconnected world of the 5G era

provides considerable opportunities for MNOs to create much-needed
new revenue streams. However, based on the 4G-experience of the last
decade, revenue growth is not to be taken for granted, and cost-efficiency
needs to be a priority. Power backups forms a substantial part of both
capex and opex. Operating costs usually exceed the purchase price for
power backup solutions, and comparing the total cost of ownership (TCO)
between lead acid and lithium batteries, the latter comes out stronger. The
longevity of the lithium-ion batteries combined with the option of adding
more advanced battery-management systems reduces operating costs
significantly, resulting in a favorable TCO.

3. New Power Solutions for Denser Networks: Network densification is a

prerequisite to deliver on the high-speed and low latency that 5G promises.
The superior energy density of the lithium battery makes it ideal for power
backup in urban areas, where premise rents and the need for a denser
network is high. However, to save cost and precious time in 5G-deployment
MNOs need to look into new ways of powering the small cell infrastructure.

4
4. Monetize Your Power Backups – Cut Energy Cost and Open New Revenue
Streams: MNOs need to address the energy cost challenge of 5G.
According to a global survey, 90% of telecom executives believe 5G
will result in higher energy costs. The increase in total network energy
consumption is projected to increase 150-170% by 20262. As energy already
amounts to 20-40% of network operating expenditures3, keeping energy
costs down will be paramount for MNOs in the 5G era. However, the
transition to a more sustainable energy system creates new opportunities
for forward thinking MNOs to monetize energy storage assets, such
as power backups. The emergence of renewable energy has led to an
increase in energy price volatility all over the world, and a surge in demand
for energy storage. Intelligent on-site lithium battery storage can be
used for energy cost optimization. Energy price peaks can be avoided
by charging batteries whenever electricity rates are at their lowest and
discharge during the most expensive times of day. Furthermore, energy
storage capacity can be used to open up new revenue streams by
participating in demand response programs or selling excess energy back
to the market.

5. Fight Climate Change: The telecom industry will not be exempt from
pressure from consumers, investors, and policy makers to reduce
greenhouse gas emissions. Today, 80% of mobile operators’ greenhouse
gas emissions are generated by network operations.4 As energy
consumption is expected to increase in the 5G era, energy efficiency and
the decarbonization of energy supply will be paramount. Furthermore, a
failure to decarbonize the energy supply is likely to be a cost driver as the
price of carbon is expected to continue to rise in the near future. To be part
of the solution to the global climate crisis and avoid rising carbon prices,
MNOs need to switch from traditional back-up solutions, such as lead acid
batteries and diesel generators, to lithium. In addition, the transition from a
fossil-based energy system to a renewable energy system demands energy
storage. And lots of it. By utilizing onsite power backup capacity as an
energy storage asset, MNOs can reduce their own carbon emissions and
facilitate the ongoing transition to the decentralized and decarbonized
energy system of the future.

5
Introduction: Climate
Change and the 5G Era
Every major change in technology means major chang-
es for society. The 2010s was defined by innovations
leveraging 4G technology. Now, we are at the threshold
of a new decade and on the verge of a new technolog-
ical paradigm with 5G. At the same time, the 2020s will
be the pivotal decade where the world needs to come
together to avoid a climate disaster. Both of which will
have major implications for mobile operators – creating
both challenges and opportunities.

The Hyperconnected World of the 5G Era

In the 2010s, 4G enabled smartphones and gave us a world of information
at our fingertips. In the 2020s, 5G will bring much more to the table than just
increasing speed and throughput. In addition to enhancing mobile broad-
band for higher data rates across wider areas, it will empower massive
machine-type communications to support internet of things services being
adopted en masse across many industry verticals. For example, 5G is ex-
pected to support up to one million connected devices per square kilometer,
compared to 2,000 with 4G5. Plus, it will offer ultra-reliable low-latency com-
munications for mission-critical applications, and network-slicing will add
opportunities to prioritize and customize connectivity by application.

Cellular IoT Connections by Segment Global Mobile Data Traffic

and Technology (Billion)6 (EB per Month)7
Broadband IoT and Critical IoT (4G/5G) 5G
Massive IoT (NB-IoT/Cat-M) 2G/3G/4G
Legacy (2G/3G)

6.0 250

5.0
200

4.0
150
3.0
100
2.0

50
1.0

0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Source: Ericsson (2020) Source: Ericsson (2020)

6
Behind the technology, the exponential growth in data, and the number of
connected devices, lies the true paradigm shift. 5G will enable a hypercon-
nected world. One where not only humans are connected via their phones,
but where everything is connected: from self-driving cars and refrigerators to
industrial robots and pacemakers. The hyperconnected world of the 5G era
will bring smarter industries, cities and homes, and new and bold innovations
that will reshape society.

As networks are being deployed all around the globe, new innovations, busi-
ness models, and applications will emerge and change the way we work and
live. Just as 4G did for the last decade, 5G and the innovations it will enable
will come to define the 2020s.

The Role of MNOs in the 5G Era

We are still in the early stages of the 5G era. It was estimated that by the end
of 2020 more than billion people, or 15% of the world’s population, lived in 5G
coverage areas and some 220 million people were connected to 5G, a num-
ber that is expected to rise to 3.5 billion to 2026.8

The blending of 5G, edge computing, and artificial intelligence in the hyper-
connected world of the 5G era provides considerable opportunities for MNOs
to create much-needed new revenue streams. However, based on the 4G-ex-
perience of the last decade, revenue growth is not to be taken for granted,
and cost-efficiency needs to be a priority. If not managed properly, there is
also a risk that energy consumption and carbon emissions from networks
could rise significantly as 5G is deployed worldwide.9

However, the most clear cut implication is that the role of mobile operators will
become even more system critical in the hyperconnected world of the 5G era.

7
Climate Change and the
New Energy Landscape
Whilst 5G is being deployed on a global scale, the world
is coming together to fight climate change. To reach the
goals of the Paris Agreement, the landmark international
accord that was adopted by nearly every nation in
2015, greenhouse gas emissions need to be halved by
every decade to reach net zero in 2050.10 The transistion
from a fossil-fuel based energy system to a renewable
energy system will create new ways to monetize energy
storage assets, such as power backups in the 2020s.

Surge in Renewable Energy Global Carbon Law: C02 Reduction Needed

Fueled by innovation, investments, and gov- to Reach the Paris Agreement13
Global CO 2 emissions (GtCO 2/yr)
ernment support, there has been a surge in CO 2 removal (GtCO 2/yr)
renewable energy in the energy mix. In the US CO 2 emissions from land use (GtCO2/yr)

alone, the installed capacity of wind and solar

45
increased by a factor or five during the 2010s.
Under a scenario of high electrification – a ne-
cessity to reach the climate goals of the Paris 40

Agreements – wind and solar could provide

about half of America’s electricity by 2030, up 35

from 9% in 2019.11
30
After years of depending on regulation for
growth, renewable energy sources have be-
come a powerful and cost-effective source of 25

electricity in their own right. The costs of wind

and solar have fallen so dramatically that in 20

some regions of the US, the UK and Europe,

wind power has become cheaper than tradi- 15

tional high-carbon energy resources. As costs

continue to fall, the renewable energy sector 10
will only keep growing.12
5

0
2020 2030 2040 2050

Source: Stockholm Resilience Centre

8
Energy Storage Is the Missing Link
The challenge with renewable energy is that the two main sources of renew-
able energy, wind and solar, are intermittent. The missing link between renew-
able energy and constant reliability is energy storage. As costs fall, renewable
energy storage will play an increasingly important role in the transition to a
decarbonized energy system. Between 2020 and 2030 the demand for lithium
powered energy storage alone is expected to increase by a factor of 22.14

Putting a Price on Carbon

The price of emitting carbon is on the rise and will likely continue to rise as
politicians of all stripes introduce green regulations. The Grantham Research
Institute at the London School of Economics counts over 1,900 pieces of
climate legislation around the world. Almost two-thirds were enacted in the
past 10 years. In 2010, about five per cent of the world’s emissions were cov-
ered by a carbon price. Today, that figure is more than 15 per cent. This year,
China is expected to roll out the world’s largest carbon pricing scheme. The
EU currently has the next-largest such scheme and plans to expand it. And in
the US, Joe Biden is promising to make fighting climate change a centerpiece
of his presidency.15

New Opportunties in the New Energy System

The so-called energy transition refers to a shift from centralized, carbon-in-
tensive power plants to more decentralized, renewable energy resources. The
implications of this can not be understated. (See graph) This will in turn affect
all aspects of the energy ecosystem. And open up for new ways for end-users
to monetize investments in renewables and energy storage assets, by selling
excess energy back to the grid.

Global Electricity Generation Mix16

Historical global power generation mix 2019 Forecast

100%
Other
90% Hydro Solar

80%
Nuclear
70% 56% solar & wind
69% renewables
60% Oil Wind

50%

40% Gas

30%

20% Coal
24% fossil fuels
10% by 2050

0%
1970 1980 1990 2000 2010 2020 2030 2040 2050

Source: BloombergNEF, IEA

9
Five Reasons to
Rethink Power Backup
in the 5G Era
Power backup could be a crucial part of the solution
to the challenges mobile operators face in the 5G
era. Today, power backups are used as an insurance
policy: critical to have, but only used for a fraction of
the time in the event of power outages. But it could be
turned into a vital tool in reducing energy costs and
fighting climate change. This represents considerable
opportunities for forward thinking operators to monetize
their energy storage assets.

The telecom network of the future needs to be smarter, greener, and more
cost-effective. And in a the hyperconnected world of the 5G era, connection
must never be lost. Simply put, the connected world needs great power backup.

Telecom battery backup has long been a costly and challenging issue. Tradi-
tional lead batteries need to be frequently changed, diesel is costly and pol-
lutes the environment, and actual back-up time and life expectancy of bat-
teries is uncertain due to lack of intelligence. First, MNOs need to switch from
conventional lead acid and diesel power backup to long-lasting sustainable
lithium. Secondly, the transition to a more sustainable energy system creates
new opportunities to monetize energy storage assets.

Lithium-Ion battery cell Lead acid (VRLA) battery cell

Energy density 120-300 Wh/kg 30 Wh/kg
Tempeterature sensitivity Degrades at 35+°C Degrades at 25+°C

Maintenance requirements17 Maintenance free Regular maintenance, about every 3 month

Life expectancy (at 25°C)18 >15 years 5-6 years

Energy efficiency19 95% 80-85%

Size Half the volume vs VRLA

Weight A quarter of the weight vs VRLA

CO2-reduction of more than 20%

Sustainability
per kWh capacity vs VRLA

Usable energy20 80% 50%

10
Here Are Five Reasons for MNOs to Rethink
Power Backups in the 5G Era:

1. Keep Networks Up and Running

In the hyperconnected world of the 5G era connectivity must never
be lost. MNOs need to turn uncertainty to predictability by replacing
lead acid with modern smart lithium power backup solutions.
5G networks are reliant on a constant supply of power. In the event of a 5G
network failure, the entire ecosystem of connected devices could collapse.
Autonomous vehicles, drones and other driverless types of technology would
come to a standstill, people could be locked out of their smart homes, and
municipal infrastructure could stop working. Large segments of the society
and the economy could come to a halt.

Even devices or machinery that do not rely on a continuous flow of electricity,

as they have built-in power storage or generation capacity, could go down in
the event of a power outage – not directly because of the blackout itself but
because they rely on 5G, which is disabled by the blackout.

To complicate matters further, the risk of natural and man-made power-grid

failures is likely to increase.

First, evidence suggests that climate change increases the frequency of ex-
treme weather such as heat waves and severe storms straining critical infra-
structure and making power outages more likely.21 Second, given the pace of
power-grid digitization, the threat of cyberattack-induced blackouts will prob-
ably grow in the years to come. In 2019, the European Union released a coordi-
nated risk assessment of cybersecurity of 5G networks, which highlighted the
dependency of 5G on power grids and their vulnerability to cyberattacks.22

Switch to Lithium for a More Reliable Source of Power Backup

In most markets, telecom operators are bound by spectrum licenses to pro-
vide backup capacity for a given amount of time. This typically varies from 4-8
hours, or more for more critical sites. Requirements for operators to deliver
constant uptime and a robust network infrastructure is likely to increase in the
5G era. And so are the expected penalties and churn of subscribers in the event
of network failure. Today, lead acid batteries are the dominant technology
used for power backup, but it is an old, unintelligent, and unreliable technique.

The lack of intelligence in lead acid batteries has major drawbacks. First,
the state of charge in the battery is difficult to predict with accuracy,
meaning actual back-up time is virtually unknown. Whereas the status and
lifetime expectancy of a lithium battery can be remotely monitored and
managed, turning uncertainty to predictability for MNOs. Secondly, lead-
acid batteries are less robust in how they are used and are often designed
for a very specific usage. If used improperly, e.g., by utilizing a higher depth-

11
of-discharge than designed for or at an elevated temperature, they will
degrade fast. Thirdly, the shelf-life of lead-acid batteries are significantly
shorter compared to lithium-ion batteries. Lead-acid batteries generally
have a shelf-life of six months, in contrast to lithium-ion batteries which
offer several years shelf-life.

Lastly, since lithium-ion batteries are equipped with a battery-management-

system (BMS) they are protected from misuse, e.g., over-currents, reverse
polarity, or over-voltage which are harmful to the batteries. For lead-acid,
these conditions will permanently damage the battery, causing pre-mature
failure. A Ponemon Research study found that lead acid battery failure is the
most frequent cause of unplanned data center outages, beating out other
causes such as human error, exceeding capacity, cyberattacks, bad weather
incidents, etc. The study found that as much as 55 per cent of unplanned
outages were related to lead acid battery failure.23

2. Lower TCO
Cost-efficiency is clear priority for MNOs when deploying and
maintaining 5G networks all around the world. Power back-ups
form a substantial part of both capex and opex. When deciding
on power-backup solutions, operators need to look at TCO rather
than the initial investment.
Globally, operators are expected to spend 80% of sector capex or $890 billion on
5G networks over the next five years.24 When 4G launched in 2009, mobile opera-
tors didn’t see the great returns they’d captured with earlier generations. Despite
their investments in 4G infrastructure, revenues showed flat or tepid growth. In
a few regions, including Europe and Latin America, revenues even dropped after
the introduction of 4G.25 The big winners from 4G were not so much the builders
of network infrastructure. Rather, it was the emerging technologies that lever-

12
aged 4G’s capabilities to build revolutionary hardware – mobile devices and
semiconductors – and new services, such as mobile-based social media.26

Industry analysts and telecom executives are more modest today about the
shortterm revenue opportunities in the 5G era. Whilst pursuing new revenue
streams, MNOs need to focus relentlessly on maintaining cost-efficient deploy-
ment and maintenance of network infrastructure.

Lithium Excels in TCO Comparison

Operating costs usually exceed the purchase
price when it comes to solutions for power
What Is Total Cost of Ownership?
backup, and comparing TCO between lead TCO is the purchase price of an
acid and lithium batteries, the latter comes asset plus the costs of operation.
out stronger. 27 Assessing TCO represents taking
In short, the longevity of the lithium-ion batter-
a bigger picture look at what the
ies combined with the possibility to add more product is and what its value is
advanced battery-management systems re- over time.
duces operating costs significantly, resulting in
favourable TCO.

Most importantly, lithium-ion batteries have a longer life expectancy than lead
acid batteries. At 25 degrees Celsius, a lead acid battery has a life expectancy
of five to seven years, whereas a Li-ion battery can last up to 20 years. For exam-
ple, in countries where labor costs are high, the installation cost can exceed the
purchase price of the battery itself, pointing to the cost-benefit of investing in a
backup solution with a longer life expectancy.

Li-ion batteries are also far less sensitive to and can handle temperature fluc-
tuations and spikes with limited effect on battery life, a major shortcoming of
lead acid batteries. This functionality adds to the lonegviety, flexilibility, and
low maintenance costs of Li-ion batteries in addition to reducing operating
costs for cooling and heating.

The embedded intelligence of the lithium-ion technology allows for more ad-
vanced battery-management-systems than is possible with lead acid alter-
natives. If connected to remote management system monitoring, diagnostics,
fault finding and upgrades can be conducted remotely. This saves time and
money for MNOs.

Furthermore, the energy density and energy efficiency of lithium-ion

technology is superior to traditional lead acid solutions. The energy density
– the energy stored in a given volume – is two to three times greater for
Li-ion batteries. This allows for trimmed premise rents as Li-ion batteries only
require about a half the space as a lead acid-based solution while delivering
the same power. While the superior energy efficieny of the Li-ion technology
reduces energy turnaround losses from around 15-20% for lead acid batteries
to around 5% for high quality Li-ion batteries.

13
3. New Power Solutions for Denser Networks

The superior energy density of lithium batteries makes

them ideal for power backup in urban areas, where
property rents are high and there is a greater need
for network density. However, to reduce the cost and
improve the efficiency of 5Gdeployment, MNOs need to
look into new ways of powering small cell infrastructure.

Network densification is a prerequisite to deliver on the high-speed and low

latency that 5G promises. As the phrase suggests, 5G network densification
refers to integrating more cell sites into a given space. In addition to adding
more traditional cell sites, 5G will rely heavily on so called “small cells” being
installed in everything from lampposts, traffic lights, supermarkets, and bus
stations. The densification will be most evident in urban areas because the
more data used in an area, the denser the network infrastructure needs to be.

Deploying the 5G infrastructure is a vast undertaking. To put the massive

small cell deployment in perspective there are roughly 200,000 cell towers
in the US today, and analysts projects more than 800,000 smalls cells to be
deployed by 2026.28

Network Densification Challenges

A denser network infrastructure is challenging for MNOs for several reasons.
Municipalities are pushing back on where and how many antennas can be
installed, citing lack of installation standards and visual pollution concerns.
Reports from the US29 and the Nordics30 points to slow and cumbersome pro-
cesses for application approval to public sites as a key challenge that needs
to be addressed for successful network deployment, particularly in urban
areas. For example, in California, AT&T reported an 800-day delay for a small
cell deployment due to local officials’ scrutiny of antenna designs, radio-fre-
quency exposure, and impacts on property values.31

Another challenge is how to power the small cell infrastructure. Whether it

is a small cell or macro cell tower, the cost to connect to the power grid is
similar. Estimates range from $5,000–$15,000 per location. Tapping power
from existing buildings and/or getting municipal approval is an option but it
involves time consuming negotiations with building owners, tenants and local
agencies. At the same time, the space constraints of the small cell sites leave
little to no room for energy backup, which will be increasingly important in
the hyperconnected world of the 5G era.

14
Size Matters: Save Time and Money
By creating a central node, from which a cluster of neighboring small cells
receives power and connectivity MNOs can save precious time and avoid
charges to connect each individual small cell to the grid. At the central node,
there is also space for much needed energy backup.

By switching from large, heavy lead acid batteries to lithium-ion batteries with
higher energy density, premises rents can be trimmed. Traditional lead acid
solutions take up considerable floor space, if you compare them side by side,
lithium achieves a cell level energy density of 300-750+ Wh/L versus 50-90 Wh/L
for lead acid batteries. In other words, the lead acid battery could take up
twice the volume that the lithium would, and it would be four times as heavy.

Similarly, the smaller size of the lithium power backup can decrease visual
pollution and facilitate the process of acquiring the right permits and gaining
access to public infrastructure in the site planning process.

15
4. Monetize Your Power Backups - Cut Energy
Cost and Open New Revenue Streams
MNOs need to address the energy cost challenge of 5G. The
transition to a more sustainable energy system creates new
opportunities for forward thinking MNOs to monetize their power
backup capacity as much sought after energy storage assets.
5G will require larger amounts of energy than any previous systems, despite
being the most energy efficient telecommunications technology to date. The
reason is the dramatic increase in data traffic and the need for denser net-
work infrastructure, meaning more base stations to provide 5G coverage to
the equivalent-sized 4G area. According to a global survey of telecom exec-
utives, 90% believe 5G will result in higher energy cost. The increase in total
network energy consumption is projected to be up 150-170% by 2026.32

As energy consumption already amounts to 20-40% of network operating expen-

ditures,33 keeping energy costs down will be paramount for MNOs in the 5G era.

Changing Energy Landscape

Over the last years, we have witnessed a change in the technology, market
design, and resource mix that make up today’s power grid. Many people are
calling this change the “energy transition,” which refers to a shift in the struc-
ture of the electrical grid from centralized, carbon-intensive power plants to
more decentralized, renewable energy resources.

To put the ongoing energy transition into perspective, keep in mind that in
2010, America had 42.6 GW of wind and solar capacity. In 2020, it had 213.2
GW, about five times as much, with 33 GW added in 2020 alone. But this
progress is a mere prelude to what is set to come in the 2020s. According to
a Princeton study, wind and solar capacity would need to expand each year
through 2025 by about 40 GW before hitting 70-75 GW a year in 2026-30—
more than double the record rate of 2020.34

The influx of renewable energy to the mix has led to an increase in energy
price volatility all over the world. This in turn creates new ways in which
energy storage capacity – such as power backups – can be monetized.

• Energy Arbitrage - Charge Batteries When Costs Are Low

and Discharge When Costs Are High
In markets with time of use rates, MNOs can leverage the price volatility
of electricity by using the battery energy storage capacity to store
energy when prices are low and use the store energy when prices are
high. Markets with time-of-use (TOU) rates typically have both time of day

16
 and seasonal factors that affect the rates, with rates during peak times
as much as four times higher than offpeak times. With intelligent on-site
lithium battery storage, the operations can be optimized to charge the
batteries whenever electricity rates are at their lowest and discharge
during the most expensive times of the day.

• Peak Shaving – Reduce Costly

Demand Charges Demand Charges Explained
MNOs can utilize energy storage to Demand charges are additional
reduce demand charges associated fees that utilities in some markets
with electricity usage. Similar to charge non-residential customers
operation with energy arbitrage, by for maintaining constant supply of
charging batteries in offpeak time,
electricity. In contrast to time-of-
the batteries can be discharged to
during peak periods to reduce demand
use rates, demand charges are not
charges. With demand charges often based on energy consumption, but
at a third of the overall electric bill, by on the highest amount of power
optimizing battery discharge cycles an drawn during any, typically 15-minute,
MNO can save money through demand interval during the billing period.
charge reduction.

• Demand Response – Earn New Revenue

by Responding to Grid Conditions
Utilities in the US, and in some European and Asian markets, offer financial
incentives for end-users to reduce their energy consumption during peak
hours. MNOs can utilize energy storage to participate in so called demand
response programs, and ancillary services like frequency regulation, to
create new revenue opportunities. By utilizing batteries to reduce demand
in response to grid signals, MNOs can earn new revenue from otherwise
idle assets.

• Virtual Power Plant – Produce and Sell

Excess Energy Back to the Grid
The decentralized energy system of the future creates opportunities for
telecom companies to use energy storage paired with renewable energy
not only to cater to their own power supply, but also to sell excess energy
back to the grid.

Japanese telecommunications group Nippon Telegraph and Telephone,

NTT, is about to transform itself as the global trend of decarbonization
accelerates. NTT consumes one per cent of the electricity generated
in Japan to run its telecom infrastructure. It now plans to use this
infrastructure as part of its new businesses involving decarbonization.
For example, NTT is considering installing lithium-ion batteries at its 7,300

17
telecom service buildings across Japan
so it can store electricity produced
from local renewable energy sources What Is a Virtual Power Plant?
such as sunlight and wind power and A virtual power plant (VPP) is a
use it when the sun doesn’t shine, or cloud-based distributed power
the wind doesn’t blow. Together with
plant that aggregates the
Mitsubishi Corp, NTT also plan to break
into the business of virtual power plants,
capacities of distributed energy
connecting distributed renewable energy resources – e.g. wind and solar
through a cloud-based control center power – for the purposes of
and selling excess electricity directly to enhancing power generation,
consumers.35 This is part of a major push as well as trading or selling
into the renewable energy sector by the power on the electricity market.
company. In the summer of 2020 NTT
announced they will be investing more
than one trillion yen ($9.3 billion) by 2030,
with the ambition to provide more than
10% of the nation's renewable energy
capacity at that time.36

18
5. Fight Climate Change
To be part of the solution to the global climate crisis and avoid
rising carbon prices MNOs need to switch from traditional back-
up solutions such as lead and diesel to lithium. And by connecting
their energy storage assets to the grid they can facilitate the
ongoing transition to the decentralized and decarbonized energy
system of the future.
The telecom industry will not by exempt from the pressure from consumer,
investors, and policy makers to reduce greenhouse gas emissions. The growth
of power consumption by 5G networks, could cause a similarly growth in
GHG-emissions if not managed properly.

Most of a mobile operator’s carbon emissions come from the radio access
network, making it a prime target for environmentally-friendly improvements.
About 80 percent of a mobile network’s energy is consumed by base station
sites.37 As energy consumption is expected to increase energy efficiency and
the decarbonization of energy supply will be paramount to reach the industry
wide industry-wide climate action roadmap, to achieve net-zero greenhouse
gas emissions by 2050.38 Furthermore, a failure to decarbonize the energy
supply is likely to be a cost driver as the price of carbon is expected to con-
tinue to rise in the near future.

From Lead to Lithium

By switching from lead acid power backup to lithium MNOs can reduce
their carbon footprint substantially. Lithium-ion energy storage offer a CO2
reduction of more than 20% per kWh capacity compared to the traditional
lead acid technology.39 From a sustainability perspective the most important
difference between lead acid and lithium is their energy density (Wh/L); lead
acid battery needs to be replaced every fifth year, whereas a lithium battery
can last up to 20 years to cover the same energy demand.

Meanwhile great progress is being made to recycle lithium batteries. Recy-

cled batteries have the potential to decrease emissions even further and is
for example a cornerstone of the EU Commissions proposed regulation on
battery sustainability.40 With the best recycling technologies available, up to
95% of the batteries can be effectively recycled, and up to 90% of the met-
als nickel, manganese, and cobalt can be recovered for reuse. Continuous
progress is also being made in the recovery rate of lithium, and now the vast
majority of the metal can be reused.

Reduce Off-Grid Diesel Dependency

In many low and middle-income countries, access to mobile connectivity
has been advanced by the expansion of mobile towers into areas either not
connected to a national grid, or connected but receiving unreliable electri-

19
cal power. In these locations, “off-grid” and
“bad-grid” towers tend to rely on on-site
diesel-powered generators, inflicting a
measurable cost on the environment and TAWAL: From Diesel to Lithium
the balance sheets of MNOs. Nearly half of TAWAL, the leading telecom
all towers in Sub-Saharan Africa, and 16 per tower company in Saudi Arabia,
cent of towers in South and Southeast Asia, have added lithium powered
are still categorized as either off-grid or energy storage solutions to 974
bad-grid, and 88% of these continue to run
of their off-grid telecom towers
on diesel power.41
through a collaboration with
For MNOs and telecom tower companies’ Ericsson and Polarium. Before,
reduction of diesel dependency is a top the off-grid sites relied on
priority on their sustainability agenda. In
dual diesel generators to keep
2017, American Tower Company, one of
the network up and running
the world’s largest tower companies with
approximately 180,000 telecom tower sites, 24 hours per day. Now, diesel
established a goal of reducing our Scope 1 dependency is limited to eight
fossil fuel consumption and greenhouse gas hours a day and only a single
emissions in Africa and India by more than diesel generator is required
60%. This is achieved through replacing lead for recharging the batteries.
acid batteries and diesel generators with
Resulting in a reduction of
lithium-ion batteries and broader utilization
carbon dioxide emissions by
of solar energy.42
33,000 metric tons per year.
Furthermore, in many low and middle-income
countries using solar+storage is cheaper
than using the grid for power supply.

Enable the Decarbonized Energy System of the Future

Lithium-ion batteries is a core technology in the transition to a sustainable
future, most associated with enabling the electric vehicle revolution. Howev-
er, it is also a key enabler in the transition to a renewable energy system. The
challenge with renewable energy is that the two main sources of renewable
energy, wind and solar, are intermittent. To truly leave fossil fuels behind,
renewable energy needs to be turned into a dispatchable asset, which means
that it can be turned on and off or up and down, to match the energy demand
at any given moment.

This represents an opportunity for MNOs to monetize their power backup

solutions by using peak shaving and selling excess energy back to the grid
(see page 16), and by reducing their carbon footprint and facilitate the transi-
tion to a decentralized and decarbonized energy system.

20
About Polarium
Polarium is a Swedish company dedicated to providing
the best performing, safe and sustainable energy
storage solutions built on lithium-ion technology for
the telecom, commercial, and industrial segments.
The company was founded in 2015 with the purpose of
empowering a smart and sustainable world with the
help of energy storage.

We are driven by innovation and cutting-edge technology, resulting in ad-

vanced technology made easy to use. Our energy storage solutions are supe-
rior in quality, recyclable, certified, and designed to the highest safety stan-
dards. The embedded intelligence of our lithium batteries puts you in charge
and minimizes maintenance.

Our headquarters and R&D center are situated in Sweden and we have man-
ufacturing in Mexico and Vietnam. Through our global sales channels and
representations, we serve customers worldwide.

Today, our market-leading solutions are in use on all continents and in all cli-
mate zones – from the Equator to the Arctic – enabling our customers to move
away from lead acid batteries and fossil fuels to long-lasting, smart, and recy-
clable lithium batteries – reducing costs as well as environmental impact.

21
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