Battery energy storage (BES) is attracting increasing attention for balancing variable renewable electricity (VRE) production in mainland power systems. However, the application of storage systems is argued to be even more relevant in islands or isolated systems which suffer more acutely from existing challenges in power system management. This paper investigates the use of storage for the island of Jersey, primarily in for two applications; reducing exposure to peak pricing over the existing interconnector to France, and also deferring or removing completely the need to use of on-island generation to supply peak loads. The results demonstrate that an investment in energy storage cannot be justified merely by the benefits from making profits from these applications. However, we consider how the investment equation could change as the cost of BES falls into the future and if it can provide additional benefits such as avoidance of the cost of replacement generation.