The NSW Government says it will invest $1.2 billion over the next 10 years into renewable energy.

The upcoming state budget reportedly includes money to fast track critical energy infrastructure - setting up five renewable energy zones (REZs) across the state and inviting private companies to build solar, wind and hydro plants to replace retiring coal stations.

The state also plans to link the new zones to the grid with a major upgrade of poles and wires.

“Renewable energy zones are modern day power stations, providing cheap and clean power for the homes and businesses of NSW,” Treasurer Matt Kean says.

“This is the state's largest-ever investment in infrastructure for renewable energy and is expected to help create 2,700 direct construction jobs across the state.

“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.”