Decarbonizing island energy systems is challenging due to isolation, high reliance on imported fossil fuels and variable renewable generation. Tilos, a small Greek island, has become a model for sustainable island development through the EU-funded TILOS project, which combined wind, solar and sodium–nickel chloride (NaNiCl₂) batteries. While successful, the system’s limited flexibility for long-duration storage motivates exploring alternative solutions.

This thesis evaluates whether a hybrid system combining vanadium flow batteries (VFBs) with hydrogen storage (H-BESS) could deliver greater societal value than the existing NaNiCl₂ configuration. The analysis applies a Social Cost–Benefit Analysis (SCBA) framework, extending beyond techno-economic comparisons to include environmental and social impacts. Net Social Benefit (NSB) and Levelized Cost of Storage (LCOS) serve as the main decision metrics.

A MATLAB-based computational model simulated Tilos’ annual demand (3,108 MWh) and renewable supply (2,553 MWh) under three scenarios: pessimistic, balanced, and optimistic. Results show the hybrid system increases renewable utilization (90.1% vs. 85.4%), reduces curtailment (–118 MWh/year), and modestly improves energy autonomy. Economically, the hybrid system achieves lower LCOS in balanced (€510/MWh) and optimistic (€263/MWh) scenarios compared to NaNiCl₂ (€656–555/MWh). NSB outcomes range from –€156k (pessimistic) to +€990k (optimistic), with sensitivity analysis identifying VFB capital cost as the most critical factor.

Beyond economics, the hybrid system delivers additional societal value through CO₂ reductions (21.2 t/year), potential hydrogen use in other sectors and near-complete recyclability of vanadium electrolytes.

The study concludes that hybrid VFB–H₂ systems can provide superior societal benefits under favorable cost trajectories. Policymakers should consider phased deployment on Tilos and support measures for VFB cost reduction and hydrogen market development, with potential replication across other Greek islands.