How Critical Will Nokia's Virtual Power Plant Solution be for Improving Grid Stability and Energy Efficient Telco Operations?

Subscribe To Download This Insight

By Alexander McQueen | 1Q 2024 | IN-7273

Nokia has launched its own Virtual Power Plant (VPP), a solution designed to leverage typically idle backup batteries as a storage solution for energy during power outages. The solution can also be used to integrate renewable energy into the grid for supply to the wider ecosystem.

Registered users can unlock up to five pieces of premium content each month.

Log in or register to unlock this Insight.


Demand for Energy Efficiency Grows


Over the last few years, there has been greater attention toward improving sustainable practices in the telecommunications sector and an increasing requirement for Communications Service Providers (CSPs) to align growth strategies with environmental responsibilities. The transition to 5G and increasing consumer demand for fast connectivity is increasing telcos’ total energy consumption, while rising global energy prices are also placing upward pressure on telco operating costs. This creates the challenge for companies to reduce energy consumption and keep costs down, while avoiding compromising user experience. To achieve this, CSPs are beginning to leverage energy-efficient technologies and practices.

Nokia is leading in this space with a broad portfolio of energy efficiency solutions supporting sustainable telco operations. In February this year, Nokia launched the latest of these solutions, Nokia’s Virtual Power Plant (VPP), its own version of an offering first launched by Finnish telco operator Elisa in early 2023. The VPP refers to a way that telcos can use parts of their mobile network to balance energy supply and demand. Through the introduction of VPPs, telco groups can also play a key role in tackling the climate crisis by storing surplus renewable energy and improving grid stability, a critical challenge for integrating renewables.

Nokia Paving the Way for Energy Efficiency


According to Elisa, the telecommunications industry is the world’s second largest user of batteries, as it is required by regulators to maintain backup power for base stations in the case of a power cut. VPPs are based on the usage of telco operators’ distributed network of these batteries, which are typically idle. The batteries can play a pivotal role in balancing the supply and demand of both grid energy and intermittent renewable energy. VPPs aggregate power from distributed renewable energy sources such as solar and wind to store in batteries for release when energy production falls or there is a spike in demand. Nokia’s VPP solution works in the same way.

Many countries have transmission system operators managing the electricity grids and power reserve markets. Power reserve markets work by auctioning contracts to enable third parties to provide power. By winning these contracts, a network operator can use their backup batteries to power their base stations or provide energy to the wider market instead of consuming grid energy. By supporting the integration of renewable energy, VPPs can also contribute to a reduced Carbon Dioxide (CO2) footprint for network operators.

Nokia’s VPP solution ensures the safety of battery use in the reserve market and estimates the availability of backup power capacity based on consumption profiles for each power station. Machine Learning (ML) algorithms are used to create smart offerings based on actual and predicted power consumption of base stations and the available backup capacity. This can turn telcos’ backup power into a source of steady financial return by integrating this power into the grid for purchase and consumption by other organizations. Nokia’s VPP Controller Software contributes to the stability of the electricity grid and creates a new purpose and function for base station backup batteries.

In the week leading up to Mobile World Congress (MWC) in Barcelona, Nokia also announced a number of other energy-saving measures. These include:

  • Extreme Deep Sleep Mode for Massive Multiple Input, Multiple Output (mMIMO): Also referred to as “zero traffic, zero watt,” extreme deep sleep mode uses Nokia’s latest AirScale radio architecture and ReefShark System-on-Chip (SoC) chipsets. The solution works by detecting periods of low network traffic and shutting down key parts of select radio units’ hardware, or all radio resources when there is zero traffic. The company estimates the solution can reduce power consumption of radio equipment by 97% compared to a cell on air, but without traffic. The development of Nokia’s MantaRay Energy solution uses Artificial Intelligence (AI)/ML to automate and optimize the configuration of Radio Access Network (RAN) energy saving modes to further enhance energy efficiency.
  • Liquid Cooled for Baseband Hotel Sites: This cooling solution enables up to 90% energy savings in baseband hotel cooling systems compared to traditional active air cooling. An 80% reduction in carbon emissions can also be achieved when waste heat is repurposed for other uses like building heating systems.

Are VPPs the Next Step for Energy Transition?


Over the last year, the lack of grid capacity has become an increasingly significant hurdle to implementing renewable energy into the grid and has put many companies’ net-zero targets at risk. Given the distributed nature of telcos’ backup batteries, the industry is in a strong position to support this transition and provide constant energy supply to the industry. Solutions like Nokia’s VPP Controller Software and Elisa’s Distributed Energy Storage (DES) are effective tools for operators to drive environmental benefits by improving the efficiency of energy consumption and incorporating renewable energy into telco networks. A report by Elisa states that by using AI-powered VPP systems, European network operators could combine battery backup infrastructure to store 15 Gigawatt Hours (GWh) of green energy. However, there is a criticism of VPPs, especially during the case of power outages, that relying on battery backup power is likely to compromise network performance and reliability. Despite this, it still acts as a useful solution for integrating renewable energy into the grid.

These solutions also provide revenue-generating opportunities by offering VPP-as-a-Service to monetize existing passive infrastructure, sell excess power to the grid, and/or provide energy management services to the wider ecosystem. This monetization can help increase the bottom line of network operators at a time when rising energy prices and high energy expenditure are impacting telcos’ revenue.

On top of Nokia’s leading energy-efficiency solution portfolio, the company announced at MWC that it is bringing forward its net-zero target year by a decade to 2040. This further showcases the company’s focus on sustainability and solidifies its commitment to promoting energy-efficient telco networks. Through its VPP solution, Nokia is not only leveraging technology to reduce its own energy consumption, but is also providing necessary infrastructure to support the wider energy transition.


Companies Mentioned