The purpose of this study was to design and evaluate an optimal energy supply system for the isolated island, Gasado, with microgrid technology. Simulation of a renewable energy power system, including energy storage (an energy storage system -ESS), economic analysis, and evaluation of external CO 2 costs, was conducted for Gasado. The results showed that a renewable power system, supplied with ESS, was the best option, considering climatic conditions, and the load pattern for the target area.