Environmentalists have welcomed NSW's new electricity strategy as an opportunity to accelerate the transition to clean energy.
The state government says its new strategy will ensure affordable and reliable electricity, save households about $40 a year and give NSW one of the world's highest reliability targets.
Energy Minister Matt Kean said it would attract $8 billion in investment for emerging energy technologies "diversifying our energy supply and creating jobs for the future".
The plan, which was released on Friday, includes Australia's first coordinated renewable energy zone in NSW's Central West region.
"As our existing power generators approach the end of their lives, we need to ensure low-cost alternatives are coming online," Mr Kean said.
"By focusing on reliability, we can ensure that we can get the benefits of renewables without the reliability problems we have seen in other states."
Nature Conservation Council chief executive Chris Gambian said in a statement that the strategy "could really shift the dial" on clean energy, and sends a strong message on the right direction for the electricity sector.
Mr Gambian welcomed the planned renewable energy zone as a way to diversify the economy in a drought-stricken region.
The Public Interest Advocacy Centre also welcomed the strategy, supporting the transition to low-cost, low-emission renewable energy.
The centre's policy team leader Craig Memery said the cost of any new investment needed to meet the proposed higher reliability standard should be shared fairly.
Additional costs to meet "broader social objectives" should be recovered from budget revenue, Memery said in a statement.