Aiming to contribute to sustainable development differen t technological concept including biomass combustion and gasification, wind, solar and hydropower will be examined in parallel with the local capacity and particularities. Alteration of existing technologies in order to achieve increased efficiency and rel iability of stand-alone power supply in selected isolated regions will be investigated. The technical, operational, economic and environmental characteristics of renewable energy systems will be examined and hybrid systems will be formulated for the optimi sed grid performance with the optimum utilisation of local energy sources. Proposals for type of technology and units' size will be formed. The specific needs of the existing and the future regional energy demand side will be taken into account. For the ad vanced utilisation of renewable sources the alteration of existing technological solution with the production of Hydrogen will be investigated and the opportunities of the introduction of novel technologies such as Fuel cells in decentralised energy grids will be assessed. The work to be carried out will result into the formulation of Specifications for the optimisation of Grid penetration in Bosnia-Herzegovina, Croatia and the Federal Republic of Yugoslavia in conjunction with the determination of specific low cost power production schemes for decentralised areas in these 3 WE countries.'