Remote communities beyond the reach of conventional electricity grids primarily rely on diesel generators (DG) to supply electricity. The systems in these communities are costly to operate because of the high price of transporting diesel to remote areas, and the low overall efficiencies caused by part-load operation of the DG. There is increasing interest to use wind energy converters (WEC) to supplement DG, thereby lowering the fuel consumption and operating costs. In order to use WEC to reduce the economic and environmental burden that DG have on remote communities, an energy storage system can be incorporated to buffer both generation and demand. This can avoid curtailment of the WEC, operate the DG at optimal efficiency, and reduce the necessary maximum installed generator capacities. Regenerative air energy storage (RAES) is a form of compressed air storage that is suitable for deployment in remote communities due to its ability to utilize waste heat from DG to boost the roundtrip efficiency of energy storage. This article presents a numerical model for a RAES system operating in a wind-diesel micro-grid. Simulations are run for varying WEC penetration levels and RAES energy capacities. The results show that in systems with WEC penetration less than 75%, increasing WEC capacity is more economic than adding a RAES system. Above penetration rates of 75%, the use of RAES achieves increased diesel savings with only slightly longer payback than simple wind-diesel systems. In the remote Canadian community case study, the optimal RAES system is 0.5 MW and 1 MW h with a WEC penetration rate of approximately 75%. A larger RAES results in further fuel savings, and thus environmental benefit, with only marginal increase in simple payback period. (C) 2014 Elsevier Ltd. All rights reserved.