Why does micelle formation take place when soap is added to water? Will a micelle be formed in other solvents, such as ethanol also?

Micelle formation takes place because of the dirt particles in water and clean water. There are two mediums that are involved: one is pure water, and the other is dirt, also called impurities. The soap also has two mediums:

(i) organic tail

(ii) ionic head

So the organic tail mixes and dissolves with the dirt, whereas the oil or grease and ionic head dissolve and mix with the water. Therefore, when the material to be cleaned is removed from the water, the dirt is taken off by the soap molecules in the water. Hence, the soap cleans by forming closed structures through the mutual repulsion of the micelles (positively charged heads).

Other solvents, such as ethanol, in which sodium salt of fatty acids does not dissolve, so not able to form such micelles.