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In this paper, an optimisation model for determination of the optimal sizes of various system components, including wind, diesel and energy storage, has been developed to obtain a reliable and cost-effective wind-diesel hybrid remote area power supply (RAPS) system. A linear programming based cost minimisation algorithm has been formulated for determination of optimal sizes of various components in a RAPS system with consideration of continually varying wind and system load. The system constraints, including power balance for both under-generation and over-generation scenarios, have been considered in the optimisation formulation. Optimisation model to minimize the total cost of the system based on hourly net present cost for both a one-day period and one-week period have been developed with allowance for unserved load during low wind conditions.