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This paper presents a study that focuses on alleviating the impacts of grid outages in Ethiopia. To deal with grid outages, most industrial customers utilize backup diesel generators (DG) which are environmentally unfriendly and economically not viable. Grid-integration of hybrid renewable energy systems (HRES) might be a possible solution to enhance grid reliability and reduce environmental and economic impacts of utilizing DG. In this study, an optimization of grid integrated HRES is carried out for different dispatch and control strategies. The optimal power supply option is determined by performing comparative analysis of the different configurations of grid integrated HRES. The result of the study shows that grid integrated HRES consisting of photovoltaic and wind turbine as renewable energy sources, and battery and hydrogen as hybrid energy storage systems is found to be the optimal system to supply the load demand. From the hydrogen produced on-site, the FC generator and FCEVs consume 143 620 kg/yr of hydrogen which is equivalent to 394 955 kg/yr gasoline fuel consumption. This corresponds to saving 1 184 865 kg/yr of CO 2 emissions and 605 703 $/yr revenue. Besides, this system yields 547 035.4 $/yr revenue by injecting excess electricity to the grid. The study clearly shows the economic and environmental viability of this new technology for implementation. • Modeling and optimization of grid-integrated HRES including grid-reliability and dispatch control. • Storage of excess electricity produced from renewable energy sources in batteries. • Onsite production of renewable hydrogen with excess electricity produced from renewable energy sources. • The role of renewable hydrogen for simultaneous decarbonization of electricity and transportation sectors. • Minimizing overall operating costs by injecting excess electricity to the grid. [ABSTRACT FROM AUTHOR]