Remote communities, such as Haida Gwaii, Canada, often have high energy costs due to their dependence on diesel fuel for generation. Haida Gwaii's lengthy coastline, exposed to the northeast Pacific Ocean, provides opportunities for capturing wave energy to potentially reduce energy costs. A mixed integer optimization model of the Haida Gwaii network is used to develop an operational strategy indicative of realistic operator behaviour. Two offshore locations are analyzed where the annual mean theoretical wave power is 42 kW/m and 16 kW/m, respectively. Results from both models show that the wave energy resource in Haida Gwaii has the potential to reduce the operational cost of energy and carbon dioxide emissions. A maximum allowable capital cost, above which the overall cost of energy would increase, is determined for various levels of installed wave capacity. Offshore transmission cost estimates are included, as well as the effects of the offshore transmission distance. (C) 2010 Elsevier Ltd. All rights reserved.