•The ancillary service of islanded operation capability in presented to increase reliability and resilience.•A proposal for the implementation of the IOC ancillary service in the Colombian electrical system is made.•The modernization of the distribution grid is important to make the IOC ancillary service feasible. The Island Operation Capability service allows operators to split the system (in case of an accident, for instance) and operate as an integral isolated subsystem. This, in turn, increases reliability, resilience, efficiency, and reduces restoration times after a blackout in the islands power systems. The provision of this kind of service from distributed energy resources has recently been introduced in different power systems. This paper outlines a proposal for the implementation of Island Operation Capability in the Colombian electricity market. The proposal considers technical variables, namely, energy not supplied, generation not delivered, and electrical losses. We developed a behavioral simulation model to test the impact of the implementation and an upgrade of the grid. Simulation results show technical benefits for the distribution system operator and economic benefits for investors and project promoters of distributed energy resources. Finally, the simulation’s results show that modernizing the distribution grid is important in order to increase Island Operation Capability and the security of the electrical system.