Nelson could build a biomass power plant to heat a core of public buildings downtown including the Civic Arena and Complex.
A feasibility study shows biomass is the most cost effective way to reduce carbon emissions and reduce heating costs.
Nelson Hydro GM Alex Love says the system would be expandable but they first need to fine-tune the costs and business model.
The cost estimates range from $2.3 million to $ 6.3 million.
The burning of wood waste would create some pollution but Love says there are modern solutions to that.