ECONOMIC VIABILITY OF SMART GRID SYSTEM Folarin, D.A, Sakala, J.D, Matlotse, E & Jeffrey, A.M. Page 1 of 9 SAIEE, 2016 Economic Viability of Smart Grid System D .A. Folarin 1 , Japhet D. Sakala 1 , E. Matlotse 1 and M. A. Gasennelwe-jeffrey 1 Department of Electrical Engineering, Faculty of Engineering And Technology, University Of Botswana, Gaborone, Botswana e-mail: dafolarin2002@gmail.com Abstract Smart grid (SG) is an electricity network that uses digital and other advanced technologies to monitor and manage the delivery of electricity from all generation sources to meet numerous electricity demands of customers. It integrates modern tools and technologies from generation, transmission and distribution to all the way to customer devices and equipment. Literature has analysed the financial loss of power interruption in industry hence SG is worth investing in to enhance cost efficiency and improvement of quality of power distribution. This paper focuses on the various financial benefits that could be derived from adapting SG into distribution networks of developing countries. Therefore adopting SG system in developing nations in Africa continent will enhance efficient power distribution in the developing economy. Key words: Smart grid, Advance technology, Financial-benefit, Developing-countries, Power distribution. INTRODUCTION Electricity plays an essential role in modern life, bringing benefits and progress in various sectors, including transportation, manufacturing, mining and communication sectors. Electric power is vital foreconomic growth and quality of life not only because it fosters the productivity of capital, labour and other factors of production, but also that it increases consumption of energy, particularly commercialenergy like electricity, which signifies high economic status of a country [1].In recent times, some authors have decided to focus on African countries [1-6]. Power losses can be defined as the difference between the amountof electricity entering the transmission system and the aggregated consumption registered at consumer meter points. From an operational point of view, electricity losses are an unavoidable cost of the transfer ofenergy across electricity transmission and distribution networks which need to be minimized, as they enforce an additional demand and energy load on the system. BACKGROUND Classification of Losses For ease of the analysis and properly account for the different sources of