  Renewable resources are constantly increasing their share in energy systems
around the world. This paper evaluates how the capital cost of renewable
technologies affects the optimal configuration and cost of energy of an
isolated power system, comprising only renewable resources. HOMER software was
adapted to include and simulate pumped storage hydropower and geothermal power
plants. Ometepe island, Nicaragua, was selected as case study because wind,
solar and geothermal resources are available, but more importantly, it has an
extinct volcano with a crater lake on its top that could be used as the upper
reservoir for pumped storage hydropower. When geothermal is considered, the
results show that this technology is able to serve the base load of the system,
reducing the required installed capacity of other resources, as well as
decreasing the storage requirements and excess electricity production. When the
geothermal option is not included, the low complementarity in time of the other
variable resources increases the required size of the solar and wind parks ,
amounting to up to 6.5 times the peak power, consequently rising the cost of
energy and excess electricity production. The different system configuration
results demonstrated that economic aspects of renewable generation are at least
as important as the natural resources availability.
