The federal government has committed $4.7 billion to help fund renewable energy infrastructure in New South Wales, as part of the national energy deal to combat escalating bills.
The announcement has been made to coincide with the NSW parliament being recalled to legislate the agreement struck at a meeting of national cabinet earlier this month.
The Commonwealth money will go towards building transmission lines from the state's renewable zones, where new sources of energy will be generated by 2030, to the grid.
It will also connect the major hydro-powered expansion of the existing Snowy Mountain scheme, dubbed Snowy 2.0, to the grid.
Prime Minister Anthony Albanese said the electricity grid needs be strengthened and reconfigured, calling the move one of the biggest announcements of his leadership.
"The Commonwealth has worked hand in glove with the states and territories to shield Australian households and businesses from the worst impacts of the energy crisis caused by Russia's illegal invasion of Ukraine," he said.
"But as well as that critical short-term action, the Australian economy can seize the opportunity of more affordable and reliable renewable energy over the long term."
Energy Minister Chris Bowen said the move is the first step to "plugging" Snowy 2.0 to the grid.
"A project like Snowy 2.0 can make a big difference ... it will make no difference unless it's connected to the grid, it's got to be plugged in and that's exactly what we're doing today."
NSW MPs returned to Macquarie Street today to vote on the national agreement aimed at helping combat rising energy bills.
It successfully passed through parliament and will allow the state government to place a temporary cap on the price of coal used to generate electricity domestically at $125 a tonne.
It was legislated by the federal government last Thursday.
It is one element of the national package which also includes bill relief to people on Commonwealth support payments.
The announcement of federal funding for the transmission infrastructure has been secured as part of that package.
It adds to the $3.1 billion already committed by the state government.
"This joint $7.8 billion funding deal will support the projected $32 billion in private investment for regional energy infrastructure by 2030," Premier Dominic Perrottet said.
"This is our opportunity to invest in our future industries that will drive jobs and wealth creation in our state."
The construction of the transmission infrastructure is expected to generate 3,900 jobs.
"This is a huge win for NSW that will create new energy jobs across the state and unlock cleaner, cheaper and more secure energy," NSW Energy Minister Matt Kean said.
"This investment will support the delivery of our electricity infrastructure road map through fast-tracking the development of REZs and transmission infrastructure."
Yesterday, the NSW's opposition leader Chris Minns said he was considering establishing a state-owned energy corporation to have government-owned assets, as he develops Labor's energy policy to take to the election in March.
"Ownership of electricity assets and a reservation policy are things that we need to look at when you are turning over every single rock," Mr Minns said.
Victorian Premier Daniel Andrews took a similar proposal, which involved reviving the State Electricity Commission, to the polls last month.
