This study addresses the limited integration of water-energy nexus dynamics in energy system models, particularly the lack of hard-linked modeling approaches. The aim is to develop and apply an integrated water-energy model using the open-source TEMOA framework, addressing the gap in quantifying reciprocal impacts of water and energy systems. The Island of Pantelleria serves as a case study due to its isolated infrastructure and ambitious decarbonization targets. First, a Reference Energy System is built and validated by comparing historical outcomes with past data and future projections with official transition scenarios. The model is then extended through the development of a detailed Reference Water System, incorporating water supply, treatment, and demand processes. Several scenarios are analyzed, including a zero-emission policy, reduction of water losses, increased in-situ water supply, and replacement of the primary wastewater treatment plant with a secondary one. Results show that the integrated model reveals substantial differences from the energy-only model. In particular, the ‘Clean Energy for EU Islands’ target indicates higher electricity consumption when water desalination is replaced by water import, an effect not captured by the energy-only model. Additionally, integrating fixed and variable components of water demand improved projection accuracy. The study concludes that a hard-linked water-energy modeling approach offers a more comprehensive understanding of the interdependencies between water and energy systems. This is crucial for planning effective, resource-efficient decarbonization strategies in isolated or resource-constrained contexts.