1. Introduction 32. The Canary Islands – An overview 43. The Canary Islands – The energy framework 53.1 Energy demand 53.2 Energy supply 73.3 The electricity sector and operational principles 73.3.1 Management 73.3.2 Support schemes 83.4 Renewable electricity 103.4 .1 Wind energy 113.4.2 Photovoltaic and solar 113.4.3 Hydroelectric energy124. Existing projects 125. The Canary Islands – Future vision 146. Conclusion 157. Bibliography 163.5% of EU citizens currently live in the islands; their fragile ecosystems, weak economies and energy systems come under increasing pressure during peak tourist seasons. Most EU islands face challenges related to market failures, inconsistent regulation, poor security of supply and are heavily dependent on imports. Their physically isolated state means that the islands have a lower GDP than the country to which they belong, their infrastructure systems suffer from large inefficiencies and high energy costs which impact the end user. However, islands such as the Canary Islands benefit from large amounts of sun, wind and water making the integration of renewable energy very promising. The Canary Islands represent an ideal testing ground, they are natural laboratories for research, development and testing of new technologies which can then be implemented throughout the world. It is clear that Europe needs these platforms if it is to achieve a sustainable future. Islands such as the Canary Islands offer this opportunity and explains why it is crucial to invest more effort in these island regions. This report aims to examine the current energy situation of the Canary Islands as a whole and will provide insights into the status quo of supply and demand, regulatory framework,...... half of the document ......: Description of the project: http://www.islepact.eu/html/index.aspx?pageid=1001&langID=3PAE RAE. (2008, December). Stories Project. Retrieved April 2014 from Existing regulations and legislative framework related to RES implementation: http://www.storiesproject.eu/docs/STORIES_Presentations/Existing_regulations_and_legislative_framework_lated_to_RES_implementation.pdfPiernavieja, G. (2012, November). Islepact. Retrieved March 2014 from Fostering Innovative Renewable Energy Projects through PPP: El Hierro, La Graciosa and other islands: http://www.islepact.eu/userfiles/file/EVENT%2021%2011%202012/ITC%20Canary%20Islands%20Isle %20Pact%20Final%20Conference.pdfRed Electrica de España. (2013). Red Electrical de España: Activities. Retrieved April 2014 from Red Electrica: Electricity System of the Canary Islands: http://www.ree.es/en/activities/canary-islands-electricity-system