Cost-out in the great outdoors
- From: "lkgeo1" <lkgeo1@xxxxxxx>
- Date: 4 Apr 2006 08:43:46 -0700
Cost-out in the great outdoors
Scott t. Ebert
Published: 04-APR-06
A changing of the guard is taking place in the great outdoors.
Technologies that worked inside for decades are falling short. Telecoms
and wireless companies are searching for alternatives.
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:
In the U.K., Orange has deployed GenCore to provide backup power for a
remote cell phone tower, 1 500 feet above sea level in Elgin, Scotland.
The system has generated several thousand hours of backup power to the
site.
In a different corner of the market, Oneida County Rural Telephone
Company, an independent local exchange carrier with about 3 900
customers, installed a GenCore unit to support digital switching
equipment in a remote hut. The system has already passed its initial
test: installed in July 2004, it kept the equipment running during a
summer storm and the power interruption that followed. Carriers like
Oneida, with their typically long-term outlook (12-15 years), may prove
to be the foremost early beneficiaries of the fuel cell's advantages
in life cycle cost.
Also, in August a major U.S. telecom company bought 119 fuel cell
systems.
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 here
http://www.businessinafrica.net/features/oil/170521.htm
.
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