The present paper investigates the introduction of pumped storage systems (PSS) in isolated power production systems with high thermoelectric production and wind energy rejection. The introduced PSS aims at: the maximisation of the wind energy penetration and the minimisation of the energy production cost. In former studies, the introduction of PSS in power production systems aims at the power demand peaks saving. In the present study, the PSS storage-production procedure is accomplished without any predefined schedule. Energy is stored whenever: wind energy is rejected and the thermal generators that burn cheap heavy fuel oil do not operate at their nominal powers. Furthermore, the production of the thermal generators that burn expensive diesel oil is substituted during the power demand peak hours. Two case studies for Crete and Rhodes are accomplished. An iterative procedure is performed, in order to calculate the optimum pumps and hydro turbines nominal powers in both islands. The optimisation criterion is the energy production specific cost minimisation. The PSS introduction in Crete yields to almost 10% annual electricity production cost reduction. The annual wind energy rejection is nullified. The investment payback period may be less than 5 years. The PSS introduction in Rhodes leads to a 1.85% annual electricity production cost reduction. The PSS project does not exhibit attractive economic indexes. Conclusively, isolated power production systems with energy production specific cost higher than approximately 0.05(sic)/kW h seem to be appropriate for PSS introduction, following the operation algorithm of the present paper. (C) 2007 Elsevier Ltd. All rights reserved.