The possibility to create a combined wind-hydro energy station in a medium size island of the Aegean Archipelago is investigated on a techno-economic basis. The proposed solution may be used to face the extremely high electricity production cost in these regions, taking also advantage of the excellent local wind potential. Additionally, a parametrical analysis is performed on a techno-economic basis in order to select the appropriate number of wind turbines and the optimum size of water reservoirs. The calculation results obtained, based on real measurements and on experimental data, validate the proposed solution. More precisely, the electricity demand of the remote system is covered in any case, the imported fuel is minimized, the renewable energy sources penetration exceeds 90%, and the negative environmental effects are remarkably reduced. (C) 2001 Elsevier Science Ltd. All rights reserved.