The NSW government will spend $1.2 billion to boost renewable energy infrastructure, with the Waratah Super Battery set to be the first beneficiary.
Labor's Hunter spokesperson and the Nature Conservation Council - which represents 160 environmental organisations across the state - have welcomed the announcement.
The money, to be included in the forthcoming state budget, will be spent over a decade through the Transmission Acceleration Facility - aimed to fast-track Renewable Energy Zones needed to replace closing power stations.
In its announcement on Friday morning, the government said the Waratah Super Battery - touted as the largest standby network in the southern hemisphere, which is aimed at preparing for the closure of Eraring Power Station in 2025 - is to be the first investment the Transmission Acceleration Facility will focus on.
The super battery will boost power supply in Newcastle, Sydney and Wollongong, after Eraring - which supplies 20 per cent of the state's electricity - closes seven years earlier than originally planned.
Renewable Energy Zones have been earmarked for the Hunter-Central Coast, Illawarra and southwest NSW after the first are established in the Central West and New England regions.
Labor's shadow minister for the Hunter and Swansea MP Yasmin Catley said the $1.2 billion investment was "critical to the state's future energy supply".
"Upgrading transmission infrastructure is going to be one of the great challenges we face as our energy grid evolves and is why, earlier this year, I wrote to the government urging the planning minister to declare Hunter transmission lines as critical state infrastructure," she said.
"This would be an important step in turbo-charging the energy output of our Renewable Energy Zones and I hope the planning minister acts on my call."
Nature Conservation Council chief executive Chris Gambian said the announcement was a "vital piece" of the state's renewable energy plan.
"NSW has some of the best renewable energy resources anywhere in the world, but we need a pipeline to get that energy from Renewable Energy Zones like the Central West and the Northern Tablelands to our cities," he said.
"An infrastructure program this large could have a very significant environmental impact, especially on wildlife and bushland if new power mains are routed through natural areas.
"While the need to connect new solar and wind plants to the grid is urgent, the government must minimise the impact this infrastructure has on nature. We have seen with the development of Snowy 2.0 how bushland and wildlife can become collateral damage if environmental protections are not observed."
Treasurer and Energy Minister Matt Kean said Renewable Energy Zones were "modern day power stations".
"This is the state's largest ever investment in infrastructure for renewable energy and is expected to help create 2700 direct construction jobs across the state," he said in a statement.
The government says the Transmission Acceleration Facility is a "critical step" in unlocking additional capacity across the state's transmission network as more than 50 major renewable energy projects make their was through the NSW planning system.
"We estimate the [Transmission Acceleration] Facility will drive at least $14 billion in private transmission infrastructure investment with all government contributions to be fully recovered," Mr Kean said.
"Energy prices are up because of Russia's invasion of Ukraine and unplanned outages at coal-fired power stations.
"Fast-tracking the construction of renewable energy is the best way to reduce our exposure to these risks and take advantage of cleaner, cheaper power sources."
The government is inviting tenders for the Waratah Super Battery until late July and it could be operational as early as the fourth quarter of 2024.
A site for the super battery has not yet been chosen.
