In a recent report released by MTN Consulting, it was revealed that network operators worldwide experienced a 7 percent increase in energy consumption during the year 2022. The report, which analyzed data from 101 operators across the telecom, webscale, and carrier-neutral segments, shed light on the evolving energy landscape of the industry.
The total energy consumed by network operators in 2022 amounted to a staggering 543.6 terawatt hours (TWh), showcasing a 7 percent rise compared to the previous year. Of this energy consumption, a significant 88 percent was derived from electricity sources. While this growth rate of 7 percent in 2022 was slightly slower than the 9 percent increments seen in both 2020 and 2021, it still reflects the industry’s ongoing demand for energy.
Webscale operators, in particular, demonstrated a remarkable surge in energy consumption, registering a 16 percent year-on-year increase. This surge played a role in elevating the webscale sector’s share of total energy consumption among network operators to 25.1 percent. On the other hand, telco operators showed a more modest growth of 3 percent in energy consumption since 2021, causing their sector’s share to decrease to 60.5 percent.
A crucial metric for evaluating the industry’s energy efficiency is energy intensity – the energy consumed per unit of revenue. Across various operator segments, the average energy intensity was calculated to be 127 megawatt hours (MWh) per US$1 million in revenue for 2022. This figure represents a slight increase from the previous year. Notably, the upswing was largely attributed to the energy-intensive nature of telco operators. Telcos consumed an average of 186 MWh per $1 million in revenue in 2022, marking a rise from the 169 MWh/$1M recorded in 2021.
Energy intensity, particularly among telco operators, is of concern due to several factors. Telcos face pressures to reduce operational costs, including energy expenses, as well as to enhance their environmental sustainability practices. Furthermore, the energy intensity should ideally remain stable or decrease over time, especially for telcos that are streamlining their asset portfolios.
The energy intensity metrics varied widely across the database examined by MTN Consulting. Among telco operators, LG Uplus exhibited the highest energy intensity at 782 MWh per $1 million in revenue for 2022. In contrast, Swisscom demonstrated commendable sustainability practices, boasting the lowest energy intensity at 45 MWh. The webscale sector also showcased varying energy intensity, with Yandex leading at 121 MWh/$1M, followed closely by Meta at 101 MWh/$1M. Meanwhile, Cognizant stood out for its efficient energy usage, consuming only 9 MWh.
Notably, the carrier-neutral segment demonstrated divergent trends, with China’s emerging data center-focused players, ChinData and GDS, emerging as the most energy-intensive, consuming 4,586 MWh and 3,528 MWh per $1 million of revenue in 2022, respectively. Digital Realty, a more established carrier-neutral operator, recorded an energy consumption of 2,255 MWh per $1 million in revenues. In contrast, tower-focused carrier-neutral operators like Crown Castle and SBA Communications exhibited significantly lower energy intensity, consuming 32 MWh and 27 MWh per $1 million in revenue, respectively.
MTN Consulting’s comprehensive analysis is based on a thorough review of sustainability-related data and reports from 101 operators, encompassing a substantial 90 percent of the industry’s revenues. This expansive coverage includes 17 webscale operators, 29 carrier-neutral operators, and 55 telecom operators. The analysis spans the timeframe of 2019 to 2022 and encompasses energy consumption derived from both electricity and fuels like diesel and natural gas.
The report not only highlights the evolving energy consumption trends within the network operator industry but also underscores the energy efficiency strategies adopted by key players in response to the dynamic energy landscape. As the industry continues to grow and evolve, maintaining a balance between energy consumption, revenue generation, and environmental responsibility remains a critical challenge for network operators worldwide.