Federal funding is being sought by Flinders Island in Bass Strait so it can generate all its power from renewable energy.
Flinders Island Council plans to put up three or four wind turbines and a mini hydro storage system that would cost up to $A25 million.
The ABC reports a privately-run turbine is already producing 25% of the island's energy.
Council general manager Raoul Harper said residents want to make that 100%.
He said the project would be cost effective In the long run because the federal government would no longer need to pay Hydro Tasmania $A3 million per year to supply diesel fuel.