Small island developing States (SIDS) have narrow resource bases and are usually extremely reliant on fossil fuel based energy for transport and electricity generation. These island economies are thus particularly vulnerable to the impacts of peak oil and also to climate change, impacts which are likely to not only hamper economic development but also adversely affect the quality of life of local inhabitants. In order to reduce the vulnerability of SIDS to peak oil, an urgent transition to renewable sources of energy is necessary. This paper propounds that the reform of power sector that took place in Caribbean and Pacific SIDS (particularly between 1970 and 2000) should have been viewed as an opportunity to re-orient power producers away from the proclivity to utilise conventional fossil fuel uses. Reasons why reform measures did not result in a substantive transition are put forward. Moreover, recommendations towards facilitating a transition to renewable energy in the power sector through future reforms are proposed.