Thesis (MBA)--Stellenbosch University, 2011. / Gaia Power is a South African start-up in the renewable energy industry. Among other products, they developed a wave energy converter, which is a device used to extract energy from ocean waves. This research deals with the economic feasibility study of the wave energy converter. Wave energy is a young field of research, especially in the South African context. Therefore sources for multiple angles of the project had to be found, analysed and brought into the Gaia Power context. Understanding the cost drivers of a wave energy plant was the foundation of the research itself. The Gaia Power specific levelised cost of electricity generation was calculated based on actual supplier quotes, reference costs found in the literature as well as assumptions. Still, such a calculation is actually more an estimation due to a high uncertainty level in all cost components. Especially the construction cost as well as the discount rate used have therefore been tested for sensitivity. Gaia Power‟s target production cost was R0.54 kWh, which equalled the Eskom tariff at the time of this research. Taking into account a R0.10/kWh fee payable to Eskom, the target cost sank to R0.44, which is about 25 percent lower than the minimum value for electricity generation cost found in the literature. This target was therefore expected to be and proved to be difficult to reach. The calculated levelised electricity cost was R0.99/kWh, with a possible range of R0.54/kWh to R1.60/kWh observed in the sensitivity analysis. These results show that the Gaia Power wave energy converter in the given specifications was not economically feasible. It was therefore recommended to rethink the specifications in order to reduce construction cost, which proved to be the largest cost driver. Besides the quantitative findings, this research also has a strong qualitative side. During the whole research it became obvious that there was an overall high risk level in the project due to the lack of experience with wave energy in general and in South Africa specifically, as well as the high impact of weather on the construction. Those risks were identified, analysed and recommended mitigation actions were derived.