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.
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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.

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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

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