In 1997, 34 countries signed the Kyoto Protocol, the first quantitative commitment to limit the damage caused by global warming. Since then, several initiatives have taken place around the globe aimed at reducing greenhouse-gas emissions to the atmosphere. Energy efficiency has become a buzz­word shared by all economic sectors, and ICT has been identified as the most promising catalyser of change.

Total GHG emissions by type in CO2 equivalents in the EU-27 in 2008 (Source Eurostat)

The reason for this is that ICT’s potential to reduce emissions in other economic sectors is estimated to be about five times its own carbon footprint, which is estimated to be 2.7% of global emissions in 2020. In addition, on the political and regulatory side, the EU member states have committed to reduce emissions of greenhouse-gases (GHGs) by 20% within the EU by 2020, while at the same time increasing the use of renewable energies by 20% and improving energy efficiency by 20%.
Eurescom study P2054, “Energy Efficiency – business opportunities for telecom operators”, started at the end of 2010 in order to identify relevant business opportunities for telecom operators in other industries’ value chains, derived from the use of enhanced telecommunications and ICT-enabled services for energy efficiency improvement.

Economic sectors and energy consumption

Excluding land use and international bunkers, GHG emissions in the EU-27 have two main origins – fuel combustion and fugitive emissions, the latter resulting from leaks or other unintended or irregular releases of gases, mostly from ­industrial activities.
There are several initiatives going on to reduce energy consumption and increase energy efficiency in different economic sectors, although the best areas for intervention considerably differ from sector to sector. The work on the P2054 study is focussed on the identification of the activities in each sector’s value chain where energy consumption (in absolute figures) can be significantly reduced by the introduction of new telecommunications and ICT-enabled services.
Outside the transportation sector, which is dominated by liquid fuels, the mix of energy use in the residential, commercial, and industrial sectors varies from country to country, resulting in different environmental impacts.

Energy consumption by sector in EU-27

Between 2000 and 2007, final energy consumption in the EU-27 has increased by about 4.3%, 1.5 times faster than the growth rate observed between 1990 and 2000. Among the economic sectors analysed, the biggest growth in energy consumption in the same period occurred in the transport and the services sectors – 34.4% and 21.1% respectively, while household consumption increased by around 8.0%.
At global level, in 2007 the residential sector consumption accounted for about 14% of the world’s delivered energy, and the transportation sector had a share of about 27%. The biggest consumer, however, is still the industrial sector as a whole, with 51% consumption of the total energy delivered.

Final energy consumption by sector in EU-27 [million tonnes of oil equivalent] (Source Eurostat)

Opportunity to change

A potential to reduce energy consumption with the use of telecommunications and ICT-enabled services is present in almost all economic sectors. Their impact on each sector’s value chain, either by altering the stakeholder’s roles and relationships or the performance of a specific process, allows to capture value and improve global efficiency.
According to EU and OECD statistics of energy consumption per economic sector, four high-potential areas of opportunity to reduce energy consumption as well as GHG emissions and improve efficiency are pointed out:
■ transportation and logistics
■ electricity and heat production
■ households and services buildings
■ city / urban activity (Smart Cities)

Due to their technological skills and long-term trusted relationship with a huge number of end users, including large users and energy providers, telecom operators are especially well equipped to face new market challenges, manage complex communication structures, and integrate devices and networks. In this context, the control of the enabling technologies and platforms to support the creation and deployment
of innovative energy consumption optimisation services are of paramount importance for telecom operators. Good examples of that are M2M and cloud computing technologies. Service offers should comprise at least three categories of services:
■ Direct services for energy saving and optimisation, including smart grids and energy management in homes/buildings;
■ Indirect services to support energy saving in economic sectors with typical high energy consumption, such as logistics and traffic as well as manufacturing;
■ Standard communications e-services reducing the energy consumption.

Telecom operators’ business opportunities

One of P2054’s initial conclusions was that the most important initiatives of a comprehensive strategy towards energy and environmental sustainability supported on ICT and telecommunications’ services should preferentially target the following areas:
Smart metering and smart grids – to close the feedback loop between energy production and consumption, allowing real-time control of the production, reducing losses (fugitive emissions) and reducing the need for over-dimensioning power grids.
Households and buildings – to support intelligent power and lighting systems, micro-power generation and solar heating, building control systems and electric power and water consumption metering and control.
Transportation and logistics – to enhance and integrate people and goods transport solutions, warehouse and inventory management, improving operational performance and enhance customer quality of experience.
Smart cities – to create and capture value through the deployment of innovative energy efficiency services for private and government subsectors, covering common city infrastructures (e.g. intelligent power and lighting) and services (e.g. transportation, healthcare, education).

Future work

After having identified the relevant telecom operators’ assets that may foster innovative services to improve energy consumption optimisation, the work in P2054 will be focussed now on the description of the service scenarios and architectures to support the targeted business opportunities, namely for energy consumption management (smart grids and homes/buildings), transportation and logistics and e-services.
Finally, a business model will be outlined for each service to deploy, including the telecom operators’ role and added value in each specific sector’s value chain and a set of recommendations for telecom operators on how to explore the new business opportunities in the area of energy efficiency.

Further information on Eurescom study P2054 is available at http://www.eurescom.eu/services/eurescom-study-programme/list-of-eurescom-studies/studies-launched-in-2010/p2054-energy-efficiency-business-opportunities-for-telecom-operators.html