The local town council has been approached by a private company interested in developing a biomass system using woodchip from forest thinnings to generate energy.
Council manager John Breen described the plan as “exciting, innovative and sustainable”.
The Kerry town, which has more than 40 hotels, was particularly suitable for such a project with accommodation facilities clustered quite closely together, he pointed out.
The need for hot water to service thousands of hotel and guesthouse bedrooms during the summer months was a key issue, and it should make the project feasible, Mr Breen said.
An extensive study is now under way with Kerry County Council deploying eight staff on research in Killarney and Tralee.
At Monday’s Killarney Town Council meeting, Mr Breen said consultations had taken place with the Sustainable Energy Association of Ireland along with Teagasc and forestry interests.
Discussions have also been held with officials in Dundalk, Co Louth, where a similar project is being pursued.
There are two likely sources of funding — the EU ELENA Project, or Escro — under which the council would form a partnership with a private agency which would provide the finance.
Mr Breen maintained an Escro facility would be most suitable.
The project would involve the construction of a biomass heating plant and the laying of a heating pipe network throughout the town.
Mr Breen said it would be essential for businesses interested in a biomass system to make all information on their energy costs and usage available to the council.
A study would also have to be undertaken in all proposed buildings to determine levels of energy conservation and any upgrades that might be needed.
Mr Breen also said the council should have full control over the pipe network to guarantee the option of future extensions of the system.
Killarney mayor Sean Counihan and other councillors welcomed the plan and urged hotels, in particular, to become involved to ensure its success.