The telecom department has decided to form a panel to study viability gap funding options for subsidising the R33,000-crore ‘green’ mobile tower project under which telecom operators are expected to run 50% of towers in rural areas and 20% in urban areas on hybrid power by 2015.

Currently, telecom towers run on electricity and diesel generators.

In an inter-ministerial group meeting on ‘implementation of renewable energy technology in telecom sector’, DoT indicated that ?subsidy could be provided either from ministry of new and renewable energy, national clean energy fund or from universal service obligation fund to bridge the gap and to make renewable emergy technology implementation project viable?.

Under the viability gap, funding the central government meets up to 20% of capital cost of a project, while the sponsoring ministry can pitch in with another 20% of the project cost to make it attractive for investors.

The committee, to be formed under the chairmanship of additional secretary department of telecom (DoT) Rita A Teaotia, is expected to give its report in two months.

It would also have members from ministry of new and renewable energy, USOF, TEC and representatives from industry bodies, including Cellular Operators Association of India, Association of Unified Telecom Service Providers of India and Tower and Infrastructure Providers Association.

“A viability gap funding scheme may be put in place encouraging the adoption of renewable energy technology in telecom sector, clearly defining the boundary of subsidy support from MNRE or from other sources,” said N Ravi Shanker, administrator USOF, who was present at the meeting.

Telecom operators had earlier told the government that they would not be able to achieve the 2015 target for using renewable energy to power mobile towers unless they are provided subsidy or viability funding.

Currently, just 4,000 of the over 500,000 telecom towers in the country run on hybrid power solution of diesel with solar back-up facility, said industry players.

Apart from solar energy, other fossil fuel technologies like bio-mass or gas is also being considered as options under the renewable energy technology.

Under DoT’s directive, 75% of rural towers and 33% of urban towers will have to be powered by hybrid energy by 2020. The telecom department said a combination of renewable energy and grid power will help reduce carbon emission by at least 8% compared with the base year of 2011.

The government has already conducted a pilot project with companies such as BSNL, Airtel, Indus Towers and GTL, where solar power systems were installed at 100 towers of each operator and the subsidy support came from the ministry of new and renewable energy.

In 2011, telecom sector regulator, Telecom Regulatory Authority of India (Trai), said the average fuel consumption, assuming diesel generator sets powered a tower for eight hours a day, is 8,760 litres of diesel every year. This generated nearly 10 million tonne of carbon emissions and led to around 3.5 billion litres of diesel being consumed by telecom towers alone.

Thereafter, the regulator recommended the green telecommunications programme, which was accepted by the government.