Wind farms operating in island systems are subject to output power limitations, related with technical constraints of the conventional generating units, namely the minimum loading levels of the thermal units (technical minima) and a dynamic penetration limit, applied for stability purposes. Evaluation of the expected wind energy yield in isolated island systems requires, therefore, proper consideration, not only of the prevailing wind conditions at the installation site, but also of the power limitations imposed by the system, which ultimately depend on the total load demand. In the paper, a methodology is presented for the evaluation of the wind energy absorption capability of island systems and the expected energy yield of wind farms operating therein. This methodology is currently applied in Greece for the determination of the power restrictions applied to existing and new wind farms, to schedule new wind capacity tenders and for the evaluation of the expected energy yield of new investments for permitting and financing purposes. (c) 2005 Elsevier Ltd. All rights reserved.