The main objective of the present study is the integration of hydrogen technologies as an energy storage medium in a hybrid power system. The existing power system of the island of Milos, which is based on fossil fuel generators and a small wind park, is assessed in the context of this paper. System level simulation results, from both technical and economic point of view, are presented for the currently existing and the proposed island's hybrid power system. The latter integrates a higher number of wind turbines and hydrogen technologies as energy storage medium, and the two system architectures are being compared taking into account not only technical and economic parameters but also Green House - Gas (GHG) emissions, fossil fuels consumption and Renewable Energy Sources (RES) penetration increase. Moreover, a sensitivity analysis has been performed in order to determine the contribution of hydrogen technologies equipment costs; with the cost of energy produced (COE) being the critical parameter. Results show that COE for the proposed power system is higher than the existing one, but on the other hand GHG emissions and fossil fuel consumption are significantly reduced. In addition, RES penetration increases dramatically and the sensitivity analysis indicates that a further reduction in hydrogen technologies equipment and subsidy on wind turbine costs would make RES & Hydrogen-based systems economically competitive to the existing power system of the island. Copyright (C) 2013, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.