The subject addressed in this paper is the analytical study of the transition of an energy generation system for a real MV/LV distribution system from one that is "fuel-based" to a distributed and smart "renewables-based" system. The paper outlines both the technical and the economic issues related to such a transition from one type of system to the other. The study is carried out for a real islanded network located in the Island of Pantelleria (Mediterranean Sea). The results obtained are presented and discussed, putting into evidence the technical, environmental and economic benefits of using smart technologies and renewable energy sources. (c) 2012 Elsevier Ltd. All rights reserved.