The Berejiklian government has its first move into large-scale renewable energy, signing a decade-plus contract to help underpin the new Dubbo Solar Hub in the state's central west.
The signing with Neoen Australia, to be announced on Friday, will begin from mid-2019 and run to the end of 2030, and help the government meet almost one-sixth of its obligations under the Renewable Energy Target (RET).
"This lays the foundation for more renewable energy procurement, which will deliver more power supply for the state, and put more downward pressure on prices," Don Harwin, Energy Minister, said.
The 24-megawatt solar hub will involve farms in Narromine and South Keswick, and is one of five in NSW to secure part of a $34.9 million large-scale solar fund set up last year by the Australian Renewable Energy Agency.
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"ARENA's funding for projects like this one and others in Glen Innes, Griffith, Parkes and Manildra highlights the growing importance of the NSW solar industry's role in ensuring we have secure, sustainable and affordable energy," Mr Harwin said.
NSW is competing with other states to gain a share of the booming solar farm industry, with some 1000 megawatts of new capacity already under construction in the state.
A memorandum of understanding was signed on Tuesday to begin work by next May on a 250-MW plant near Balranald, which would be Australia's largest. Other projects in the pipeline would eclipse the signings in 2017, one official said.
The government declined to give a price on its Dubbo contract but officials said it was competitive, and that solar farm prices were narrowing their gap on wind energy each year.
John Grimes, chief executive of the Smart Energy Council, described the deal as "fantastic" for promoting the renewable energy sector in NSW, adding it would dent wholesale prices while generating regional jobs.
"The NSW Coalition has been much more progressive than their federal counterparts," Mr Grimes said, adding however, that "there are not many policies beyond the RET [which ends in 2020] to support renewables".