Most medium and small islands of the Aegean Archipelagos face serious infrastructure problems, strongly related with the limited electrical energy available at extremely high cost. On the other hand, the area is characterized by very high wind speeds and abundant solar energy, thus the exploitation of the available renewable energy sources (RES) may significantly contribute to the fulfillment of the local societies energy demand at minimum environmental and macroeconomic cost. However, the stochastic availability of wind energy and the variable availability of solar energy, the daily and seasonal electricity demand fluctuations, as well as the limited local electrical network capacity result in serious restrictions concerning; the maximum renewable power penetration. In this context, the present paper investigates the possibility of creating a combined electricity generation facility based on the exploitation of wind or/and solar potential of an area as well as on the utilization of an appropriate energy storage configuration in order to replace the existing thermal power stations with rational investment requirements. For this purpose, the major parameters of the proposed integrated configuration are firstly calculated and its financial viability is accordingly analyzed. One of the main targets of the proposed solution is to maximize the RES exploitation of the area at a minimum electricity generation cost, while special emphasis is given in order to select the most cost-efficient energy storage device available. According to the results obtained the proposed solution is not only financially attractive but also improves the quality of the electricity offered to the local communities, substituting the expensive and heavily polluting existing thermal power stations. (c) 2008 Elsevier Ltd. All rights reserved.