The implementation of renewable energy sources (RES) in isolated power systems, as is the case of islands, constitutes both a challenge and an opportunity. The intermittency of some RES, namely wind and solar, originates problems of grid stability and a mismatch between power demand and supply. The interconnection between isolated power systems can decrease the RES variability and, thereby, minimize the problems associated with their intermittency. In this work, the endogenous resources of the islands of Pico and Faial, in Azores, were characterized and their power systems modelled. A scenario considering the interconnection between the power systems of the two islands is proposed with the objective of increasing the share of RES power in the total power production. The scenario was modelled using EnergyPLAN and the results show that RES penetration can increase 50 percentage points by 2030 in relation to the current situation. The implementation of this scenario requires additional annual costs of about 1.29 M(sic). Additionally, based on the knowledge gained from this study, measures that may lead, in the long run, to the complete elimination of the overall use of fossil fuels in both islands are presented and discussed. (C) 2019 Elsevier Ltd. All rights reserved.