Analyzing the Economic Viability of Microgrid Solutions in the South African Market

Mpho Sam Nkambule; Ali Nabil Hasan; Thokozani Shongwe

doi:10.1109/ACCESS.2025.3539691

Analyzing the Economic Viability of Microgrid Solutions in the South African Market

Mpho Sam Nkambule, Ali Nabil Hasan, Thokozani Shongwe

Electrical and Electronic Engineering Technology

University of Johannesburg

Research output: Contribution to journal › Article › peer-review

Abstract

Amidst South Africa's persistent energy crisis, this study explores the viability of microgrid systems as a pivotal solution to enhance energy reliability and sustainability. By scrutinizing factors like resource availability, grid connectivity, demand dynamics, regulatory frameworks, and financial implications, a comprehensive techno-economic analysis reveals the substantial potential of microgrids. These systems not only augment energy access and fortify grid resilience but also facilitate the seamless integration of renewable energy sources, aligning with global sustainability goals. Economic evaluations underscore favorable returns on investment, emphasizing the long-term cost efficiencies and broader societal benefits. The microgrid showcases strong financial performance with an Internal Rate of Return (IRR) of 23.1%, competitive Blended Cost of Energy (BCoE) at $ 0.073/kWh, Levelized Cost of Energy (LCoE) at $ 0.186/kWh lower than Eskom grid tariffs, and a rapid payback time of 5.5 years. The proposed microgrid has the potential to save 1,135,949.737 tons of carbon dioxide (CO2) over its 30-year lifecycle.

Original language	English
Pages (from-to)	29091-29121
Number of pages	31
Journal	IEEE Access
Volume	13
DOIs	https://doi.org/10.1109/ACCESS.2025.3539691
Publication status	Published - 2025

Keywords

Microgrid (MG)
energy management system
hybrid renewable energy system (HRES)

ASJC Scopus subject areas

General Computer Science
General Materials Science
General Engineering

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1109/ACCESS.2025.3539691

Cite this

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title = "Analyzing the Economic Viability of Microgrid Solutions in the South African Market",

abstract = "Amidst South Africa's persistent energy crisis, this study explores the viability of microgrid systems as a pivotal solution to enhance energy reliability and sustainability. By scrutinizing factors like resource availability, grid connectivity, demand dynamics, regulatory frameworks, and financial implications, a comprehensive techno-economic analysis reveals the substantial potential of microgrids. These systems not only augment energy access and fortify grid resilience but also facilitate the seamless integration of renewable energy sources, aligning with global sustainability goals. Economic evaluations underscore favorable returns on investment, emphasizing the long-term cost efficiencies and broader societal benefits. The microgrid showcases strong financial performance with an Internal Rate of Return (IRR) of 23.1%, competitive Blended Cost of Energy (BCoE) at $ 0.073/kWh, Levelized Cost of Energy (LCoE) at $ 0.186/kWh lower than Eskom grid tariffs, and a rapid payback time of 5.5 years. The proposed microgrid has the potential to save 1,135,949.737 tons of carbon dioxide (CO2) over its 30-year lifecycle.",

keywords = "Microgrid (MG), energy management system, hybrid renewable energy system (HRES)",

author = "Nkambule, {Mpho Sam} and Hasan, {Ali Nabil} and Thokozani Shongwe",

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year = "2025",

doi = "10.1109/ACCESS.2025.3539691",

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AU - Hasan, Ali Nabil

AU - Shongwe, Thokozani

PY - 2025

Y1 - 2025

N2 - Amidst South Africa's persistent energy crisis, this study explores the viability of microgrid systems as a pivotal solution to enhance energy reliability and sustainability. By scrutinizing factors like resource availability, grid connectivity, demand dynamics, regulatory frameworks, and financial implications, a comprehensive techno-economic analysis reveals the substantial potential of microgrids. These systems not only augment energy access and fortify grid resilience but also facilitate the seamless integration of renewable energy sources, aligning with global sustainability goals. Economic evaluations underscore favorable returns on investment, emphasizing the long-term cost efficiencies and broader societal benefits. The microgrid showcases strong financial performance with an Internal Rate of Return (IRR) of 23.1%, competitive Blended Cost of Energy (BCoE) at $ 0.073/kWh, Levelized Cost of Energy (LCoE) at $ 0.186/kWh lower than Eskom grid tariffs, and a rapid payback time of 5.5 years. The proposed microgrid has the potential to save 1,135,949.737 tons of carbon dioxide (CO2) over its 30-year lifecycle.

AB - Amidst South Africa's persistent energy crisis, this study explores the viability of microgrid systems as a pivotal solution to enhance energy reliability and sustainability. By scrutinizing factors like resource availability, grid connectivity, demand dynamics, regulatory frameworks, and financial implications, a comprehensive techno-economic analysis reveals the substantial potential of microgrids. These systems not only augment energy access and fortify grid resilience but also facilitate the seamless integration of renewable energy sources, aligning with global sustainability goals. Economic evaluations underscore favorable returns on investment, emphasizing the long-term cost efficiencies and broader societal benefits. The microgrid showcases strong financial performance with an Internal Rate of Return (IRR) of 23.1%, competitive Blended Cost of Energy (BCoE) at $ 0.073/kWh, Levelized Cost of Energy (LCoE) at $ 0.186/kWh lower than Eskom grid tariffs, and a rapid payback time of 5.5 years. The proposed microgrid has the potential to save 1,135,949.737 tons of carbon dioxide (CO2) over its 30-year lifecycle.

KW - Microgrid (MG)

KW - energy management system

KW - hybrid renewable energy system (HRES)

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Analyzing the Economic Viability of Microgrid Solutions in the South African Market

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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