The ongoing depletion of the fossil fuels and the dependency of the economies on them have made the need for new sources of energy more obvious. Renewable energy sources (RES) can ensure the sustainable development of the communities, and especially of those in which RES are in abundance. This study deals with the exploitation of RES in the Dodecanese Islands. Specifically, it is examined the optimum percentage by which the renewable sources can participate in the energy production system. Three different scenarios are examined. The first scenario considers that the existent system should be used less than 75% for environmental reasons, in the second scenario, a minimization of the electricity production cost is sought without any environmental constraints, while in the third scenario, it is considered that the RES' participation in the electricity production would be 30% at most according to the current legislation. The environmental impacts from the energy production are quantified and a comparison is made between the impacts resulting from the existing system and the system found from the first scenario, because this is the scenario with the highest penetration of the RES to the energy production system. (C) 2004 Elsevier Ltd. All rights reserved.