Scenario-Based Stochastic Optimization for Renewable Integration Under Forecast Uncertainty: A South African Power System Case Study

South Africa’s transition to a renewable-powered grid faces critical challenges due to the inherent variability of wind and solar generation as well as the need for economically viable and reliable dispatch strategies. This study proposes a scenario-based stochastic optimization framework that integrates machine learning forecasting and uncertainty modeling to enhance operational decision making. A hybrid Long Short-Term Memory–XGBoost model is employed to forecast wind, photovoltaic (PV) power, concentrated solar power (CSP), and electricity demand, with Monte Carlo dropout and quantile regression used for uncertainty quantification. Scenarios are generated using appropriate probability distributions and are reduced via Temporal-Aware K-Means Scenario Reduction for tractability. A two-stage stochastic program then optimizes power dispatch under uncertainty, benchmarked against Deterministic, Rule-Based, and Perfect Information models. Simulation results over 7 days using five years of real-world South African energy data show that the stochastic model strikes a favorable balance between cost and reliability. It incurs a total system cost of ZAR 1.748 billion, with 1625 MWh of load shedding and 1283 MWh of curtailment, significantly outperforming the deterministic model (ZAR 1.763 billion; 3538 MWh load shedding; 59 MWh curtailment) and the rule-based model (ZAR 1.760 billion, 1.809 MWh load shedding; 1475 MWh curtailment). The proposed stochastic framework demonstrates strong potential for improving renewable integration, reducing system penalties, and enhancing grid resilience in the face of forecast uncertainty.