Background: The economics of producing only electricity from residues, which comprise of surplus bagasse and 50% post-harvest residues, at an existing sugar mill in South Africa was compared to the coproduction of ethanol from the hemicelluloses and electricity from the remaining solid fractions. Six different energy schemes were evaluated. They include: (1) exclusive electricity generation by combustion with high pressure steam cycles (CHPSC-EE), (2) biomass integrated gasification with combined cycles (BIGCC-EE), (3) coproduction of ethanol (using conventional distillation (CD)) and electricity (using BIGCC), (4) coproduction of ethanol (using CD) and electricity (using CHPSC), (5) coproduction of ethanol (using vacuum distillation (VD)) and electricity (using BIGCC), and (6) coproduction of ethanol (using VD) and electricity (using CHPSC). The pricing strategies in the economic analysis considered an upper and lower premium for electricity, on the standard price of the South African Energy Provider Eskom' of 31 and 103% respectively and ethanol prices were projected from two sets of historical prices.