AbstractIn Canada, off-grid power production is significant, with more than 200,000 people living in about 300 remote communities scattered across Yukon, the Northwest Territories, Nunavut, and other islands. Most of these isolated sites rely on diesel to generate electricity. The operation of these remote isolated grids run on a deficit in the order of hundreds of millions of dollars yearly and must therefore be subsidized by the government. Low and high penetration wind–diesel hybrid systems (WDS) have been experimented to reduce diesel consumption. In a previous article, we explored the re-engineering of current diesel power plants with the introduction of high penetration wind systems using compressed air energy storage (CAES). This is a viable alternative to increase the overall percentage of renewable energy and reduce the cost of electricity, to increase the diesel engine lifetime and efficiency and to decrease their fuel consumption and GHG emissions. In this paper, we present the operative principle of this hybrid system, its economic benefits and advantages. Finally, we apply this concept in the case of a Canadian Nordic village to demonstrate the real energetic, ecological and economic potential of this system.