CrossBoundary Advisory
20.06.2023
Report
20.06.2023
Report

Mini-Grid Innovation Insight: Grid Densification – CrossBoundary Innovation Lab

Key Insights
On average, grid economics results improve by an average of 1.2%, in project IRR from a base case of 5%.
Grid densification results in faster customer acquisition and Network saturation and expansion sites had higher community penetration.
Network saturation (27%) and expansion (27%) have the higher average utilization compared to the control site (13%) after 1 year.
Proactively installing the distribution network through Grid Densification in a mini-grid community drives down capex per connection significantly, says CrossBoundary’s Mini-Grid Innovation Lab’s latest Innovation Insight. This could account for an average IRR increase of 1.2% for the mini-grid business case.

Download the full Innovation Insight to learn more

The Innovation Lab tested two scenarios of grid densification (i) Network saturation includes installation of all overhead distribution and customer connection accessories required throughout a community, and (ii) Network expansion includes installation of all overhead distribution throughout a community.

Analysis of data from 2020 to 2023 shows that the adoption of grid densification positively impacts grid economics, customer acquisition, and grid utilization:

  • On average, grid economics results improve by an average of 1.2%, in project IRR from a base case of 5%
  • Grid densification results in faster customer acquisition and Network saturation and expansion sites had higher community penetration, with over 80% of the community connected in less than a year, compared to control sites (~51% penetration by year 1)
  • More customers mean more utilization, sooner: Network saturation (27%) and expansion (27%) have the higher average utilization compared to the control site (13%) after 1 year

“Based on our findings, we think grid densification should be incorporated into construction best practices. All 5 developers participating in our study have already confirmed the adoption of grid densification into their standard operations. In addition, CrossBoundary’s Mini-Grid Innovation Lab is testing other technologies, including distributed mini-grids and mesh-grids, that could capture the benefits of network saturation but require less upfront capex.”

Tombo Banda, CrossBoundary Managing Director and Innovation Lab Lead