Plans are in the pipeline to double Tasmania's hydropower output by re-using water, with Prime Minister Malcolm Turnbull announcing new feasibility studies to investigate.

Mr Turnbull visited Tasmania's Trevallyn Power Station to make the announcement, flanked by Premier Will Hodgman and Federal Energy Minister Josh Frydenberg.

The studies will support feasibility work into redeveloping the aging Tarraleah scheme and enhancing the Gordon Power Station.

The Australian Renewable Energy Agency (ARENA) is also considering an application from Hydro Tasmania to explore several new pumped hydro energy storage schemes that could deliver up to 2500 MW of pumped hydro power, which could lead to hundreds of millions of dollars worth of investment.

"What we're seeing here in Tasmania is the opportunity in this state to provide even more renewable energy, wind and hydro, than it does today," Mr Turnbull said.

"There's the opportunity here in Tasmania to double the capacity of Hydro Tasmania with new investment and with pump storage, and of course it has the best wind assets in Australia — the Roaring Forties."

Mr Turnbull said, if implemented, the plan could see Tasmania become the "battery of Australia".

Malcolm Turnbull says Tasmania has the 'best wind assets in Australia'. ( ABC News: Damian McIntyre )

Vision to double capacity

ARENA has contributed $2.5 million to the studies, but much more money will be needed.

Hydro Tasmania chief executive Steve Davy said the state-owned-company was in discussions with ARENA on two studies.

"One study looks at how to increase the energy output from our system," Mr Davy said.

"The biggest component is the replacement of the Tarraleah Power Station which was built in 1938, that would increase the output by 40 per cent.

"The second study looks at 13 separate pumped hydro opportunities to test them for feasibility."

The pumped hydro projects add up to 2500 MW, which would double the capacity of the hydro system in Tasmania.

It would not require new dams, but would re-use water by pumping it back up to be used again.

The energy used to pump it back would likely be sourced from South Australia when wind power is cheap during the night.

It would require better connection with the mainland, which is where a second Basslink cable would come into play.

Premier Will Hodgman said the plan would set Tasmania up for the next 100 years.

"This will place us as the renewable energy battery of the nation," Mr Hodgman said.

Mr Hodgman said the plan would lead to Tasmania being able to power 500,000 more homes.

The studies will be completed "as soon as possible", Mr Turnbull said.