Wind parks operating in autonomous island grids, such as those encountered in the Aegean Archipelago, face considerable wind energy curtailments, owed to the inability of local electricity networks to absorb the entire wind energy production. On the other hand, plans promoting the natural gas-based electricity generation in big islands (such as Crete) question the future of wind energy. To recover wind energy curtailments and benefit from the introduction of natural gas, the adoption of compressed air energy storage (CAES) systems suggests an appreciable energy solution. Furthermore, to improve the economic performance of the proposed system, it is decided that guaranteed energy amounts should be delivered to the local grid during peak demand periods. In an effort to obtain favourable negotiation conditions for the selling price of energy delivered - and also improve the economic performance of the system, a dual mode CAES operation is currently examined. Proceeding to the economic evaluation of dual mode CAES configurations that ensure maximum wind energy recovery, the feasibility of the proposed system may be validated. Lower electricity production costs and considerable reduction of fuel consumption achieved - in comparison with the requirements of conventional peak demand power units - illustrate the system's advantages. (c) 2009 Elsevier Ltd. All rights reserved.