This study aims to develop a new approach for design and evaluation of renewable energy sources-based energy supply system using different energy demand scenarios and an optimization model. To achieve this goal, we first generate six scenarios by the combination of different supply and demand options. We then develop a new optimization model for identifying the optimal system configuration by minimizing the total energy cost subject to various constraints. We apply the proposed approach to the design problem of energy system of Jeju Island, Korea. We evaluate the different scenario-based systems of Jeju Island using economic metrics including net present cost, levelized cost of energy and annual energy expenses. The sensitivity of major process and economic parameters, and different meteorological data on the annual energy expenses is also discussed. As a result, the levelized energy cost was estimated to range from 0.53 to 134 $/kWh according the examined scenarios. We analyzed that the centralized energy production by the hybrid use of wind and solar energy is the most affordable system. We also identified the key cost driver in the distributed and centralized energy production systems; i.e., the capital cost of the wind turbine and the energy storage facilities, respectively. (C) 2017 Elsevier Ltd. All rights reserved.