The bulk procurement prototype aimed to assess the cost-saving potential of consolidating mini-grid component orders. Through aggregation, CrossBoundary’s Mini-Grid Innovation Lab hypothesized that we could achieve a 10% reduction in component costs, revolutionizing Capital Expenditures (CAPEX) in the mini-grid business model. We collaborated with mini-grid developers to standardize component needs, negotiated bulk rates with manufacturers, and rigorously tested the impact on grid economics. Mini-grids are an essential part of the energy solution in developing economies like Nigeria, yet high CAPEX continues to be a significant barrier to their widespread adoption. Bulk procurement stands as a potential breakthrough, leveraging economies of scale to make mini-grid projects more financially viable.
The Mini-Grid Innovation Lab’s prototype involved the following:
Prototype Ideation and Design: Organized user-centered design workshops with mini-grid developers to understand their component needs and plan for aggregation.
Approval: Crafted a comprehensive study contract, budget, and implementation plan, gaining approval from the funder’s board for prototype execution.
Launch and Follow-Up: Rolled out the prototype in collaboration with the procurement partner, keeping regular touchpoints to track progress until the components were delivered and study data collected.
Analysis and Publication: Scrutinized the collected data to validate or refute our initial hypotheses, and collaborated with study partners to publish the results, contributing valuable insights to the broader mini-grid and renewable energy sector.