A Tasmanian island is about to swap fossil fuel for renewable energy as its major power source.

Flinders Island off Tasmania's north-east coast has traditionally been powered solely by diesel fuel.

In December, Hydro Tasmania will flick the switch over to its Hybrid Energy Hub, which will enable the island to be powered by 60 per cent renewable energy on average.

When conditions are right, diesel generators will be switched off and the island will run 100 per cent on renewables.

The system will use a combination of solar, wind, battery storage and enabling technologies to reduce the island's reliance on expensive shipped-in diesel and provide residents with a more reliable energy source.

The hybrid energy hub is the first step in making Flinders Island run on 100 per cent renewable energy. ( ABC News: Rhiannon Shine )

Hydro Tasmania hybrid energy solutions manager Ray Massie said the project would reduce emissions by 60 per cent and put downward pressure on future power prices.

"This will reduce emissions down to about 40 per cent of what has traditionally been generated from the power station," he said.

"The use of diesel is a large expense. The overall price for their electricity won't be going down but it will put pressure on future prices."

Hybrid hub to 'future proof' Flinders

Deputy mayor Marc Cobham said the technology would help "future-proof" the island.

"It is future-proofing us against when fossil-fuels eventually start to run out and therefore become more expensive," he said.

"We will already have in place the technology to enable to us to continue on."

Ray Massie says the technology will improve the reliability of the island's power supplies. ( ABC News: Rhiannon Shine )

Michael Buck from the Flinders Island Tourism and Business Association said the system enhanced the island's brand.

"As far as our branding is concerned, the clean green image fits," he said.

"Most people that come here ask 'where do you get your power from?'

"To be able to say we get it from a clean, green source is going to be a positive as far as the island's concerned.

"It will put the island on the map and it sets an example of innovation."

Island goal to become 100 per cent renewably powered

Mr Massie said the technology would enable the island to be solely powered by renewable energy in the future.

"The islanders have an ambition for 100 per cent renewable energy," he said.

"This system will enable future uptake of renewables to achieve that over time. It is fully feasible to achieve 100 per cent in the long term."

Michael Buck says the power hub fits with the island's image of being clean and green. ( ABC News: Rhiannon Shine )

Deputy mayor Marc Cobham said the goal could be achieved through the adoption of tidal energy.

"The beauty of the system that Hydro have put in is that when a wave tidal generation is developed more, this is a perfect location and the system will allow that to just plug in," he said.

"The waters around the Furneaux Islands have been identified internationally as some of the best resources as far as tidal energy.

"So hopefully that will happen in the next few years."

Goodbye dirty diesel

Mr Buck said the business community would benefit from an end to diesel fuel use.

"We would like 100 per cent renewable energy on the island, particularly given the cost of fuel and the cost of doing business here is higher than on the mainland," he said.

"Anything that reduces the overall cost from a long term point of view is a positive as far as the island business community is concerned."

The technology was developed on nearby King Island, which was the first remote system capable of supplying the power needs of an entire community solely through wind and solar energy.

Mr Massie said, based on the King Island results, Flinders Island's power supply would become significantly more reliable.

Hydro Tasmania says the hub housed in shipping containers is becoming a showcase of the technology. ( ABC News: Rhiannon Shine )

"On King Island they had eight to 10 blackouts a year traditionally, and with the new system in place that has been one black out in two years," he said.

"We expect that to be the case with Flinders as well."

Hydro Tasmania took a different approach on Flinders Island in the way the system was deployed.

"We have modularised the enablers and we have used the platform of shipping containers," Mr Massie said.

"It is an approach we can deploy to other parts of the world. The Flinders Island Hub is becoming a showcase of the technology."