Energy Minister Matt Kean said Australia's first Renewable Energy Zone would be developed in the Central West over the next few years.

Mr Kean said the 3000 megawatt pilot program was aimed at attracting up to $4.4 billion in private sector investment into the region for clean energy generation.

He said it would provide extra capacity to power about 1.3 million homes a year and ensure reliable energy supply, particularly in peak summer periods.

"We want to create a competitive, low-cost market that delivers resilient energy supply while putting downward pressure on electricity prices," he said.

The Central West project is the first of three planned for NSW as part of the NSW Electricity Strategy which was unveiled by Mr Kean.

It said the Central West was chosen for the pilot because it has "significant existing investment and investor interest."

The plan said the region already had 4500 megawatts of projects either approved or in planning.

Closest to Orange are the approved Flyers Creek wind farm and Molong solar farm, a planned solar farm at Mumbil plus the the wind farm near Blayney and solar farm at Manildra.

The Electricity Strategy is aimed at encouraging energy-efficient technologies and smart appliances that use electricity when it is cheap and off-peak.

There would also be an Energy Security Target to ensure there was sufficient supply in the electricity grid on the hottest days when demand was at its highest.

"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," Mr Kean said.

A dedicated REZ committee will be set up to talk with potential investors and local communities about the program.

Apart from the 450 construction jobs it is envisaged there would also be opportunities for related industries including minerals processing, IT and data centres, agriculture and manufacturing.