This paper considers the case of São Miguel in the Azores archipelago as a typical example of an isolated island with high renewable energy potential, but low baseload levels, lack of energy storage facilities, and dependence on fossil fuels that incurs high import costs. Using the Integrated MARKAL-EFOM System (TIMES), a number of scenarios are examined in order to analyze and assess the potential benefits from the implementation of a seawater pumped-storage (SPS) system, in the absence or presence of electric drive vehicles (EDVs) under a grid-to-vehicle (G2V) approach. The results obtained show that the proposed solution increases the penetration of renewable energy in the system, thus reducing the dependence on fossil fuel imports and allowing, at the same time, for the deployment of EDVs as a promising environmentally friendly alternative to conventional vehicles with internal combustion engines.