VPP4Islands aims to facilitate the integration of renewable systems, accelerate the transition towards smart and green energy and help Islands to exploit energy efficiency potential and innovative storage approaches, foster the active participation of citizens and become self-sufficient in energy, while reducing costs, GHG emissions and reliance on heavy fuel oil to generate power, and creating new intelligent business, growth and local skilled jobs. To reach these goals, VPP4Islands project proposes disruptive solutions based on digital twin concept, Virtual energy storage systems (VESS) and Distributed Ledger technology (DLT) to revolutionize the existing VPP and build smart energy communities. Based on aggregation and smart management of distributed energy resources (DERs), VPP4Islands increases the flexibility and profitability of energy systems while providing novel services. VPP4Island will also enhance the Demand Response Capability of consumers by understating their behaviors and promoting self-consumption. In order to validate and evaluate the proposed solutions, two use cases in real-life with diverse assets in two leading islands are planned. The control and optimization of different systems will be extended to consider not only electrical, but also multi-energy vectors. Moreover, the qualified VPP4Islands solutions will be replicated in 3 follower islands, in order to generate and initiate smart sustainable energy plans. Also, VPP4Islands will generate durable social and environmental values for the benefit of consumers/prosumers. Finally, VPP4Islands project consortium is composed of 1 large company, 1 DSO, 7 SMEs, 3 universities, 2 RTOs, 3 islands municipalities, and 2 non-profits organisation.