The energy problem of islands differs from those in mainland countries because islandsrnneed to manage their own energy supplies. The islands are good test beds for the utilization ofrnrenewable energy production and storage technologies. The present study relates the mainrnrenewable energy resources to the electrical production in the small islands in Lake Tana. Thernnecessity to integrate some renewable energy resources is shown and various storage means arernclassified. Also, the needs for hydro pumping storage are proposed and investigated as a goodrnsolution for promoting to the increase of the penetration rate of renewable energies, particularlyrnin island electrical grid interconnections.rnIn Ethiopia there are two lakes which have Islands (Lake Tana and Lake Zeway). Amongrnthem, the island on Lake Tana (Deck Island) is the biggest Island in the country having a totalrnpopulation of about 7000 human residents within five villages. Due to the location of the Islandrnis so far the task of their electrification via grid system very difficult. Kerosene is used forrnlighting; with diesel power generation isfor milling and pumping, leaving biomass for cookingrnand dry cells for radio which are being used in this Island. Nothing has been done so far inrndeveloping the renewable energy resources, such as small-scale hydro, solar, and wind energy inrnthe Island. In this work, feasibility of renewable energy resources for electric supply system tornthis small Island is studied using HOMER (Hybrid Optimization Model for ElectricalrnRenewables) software as optimization and sensitivity analysis tool. Meteorological data fromrnNational Meteorological Agency of Ethiopia and other sources, such as NASA, have been usedrnfor the estimation of solar and wind energy potentials. Electric load for the basic needs of therncommunity, such as, for lighting, radio, television, electric baker, water pumps and flour mills,rnhave been estimated. Primary schools and health posts are also considered as energy users for therncommunity. As a result, based on the storage system, PV/Wind/pumped hydro hybrid systemrncombinations is found as having a cost of energy about $0.151/kWh which is much lower thanrndiesel generators and previously studied PV-battery hybrid systems which is estimated to costrnabout $0.325/KWhrnKey words: Wind, Solar, Hybrid, HOMER, Pumped hydro, Load Estimationrn8 M.sc Thesis by Abiyot Mekonnen in Electrical power Engineering ECE DeptsAAitrnTable