Environmentalists are hailing the NSW government’s $79 million proposal to build a second renewable energy zone in the state’s north.

The NSW government plans to make the New England region the site of an 8000-megawatt clean-power hub which the coalition hopes will help replace the state’s existing power stations as they retire over the coming decades.

The renewable energy zone, to be built in stages, will bring multiple new generators online and is expected to power more than three million homes.

NSW Deputy Premier John Barilaro said the new energy project would also lower electricity bills and create 2000 jobs during construction and 1300 ongoing jobs.

“Regional NSW is the best place in Australia for renewable energy investment and the jobs it creates, and this funding allows us to unlock that potential,” he said in a statement on Friday.

Energy Minister Matt Kean said the “astounding” interest in NSW’s first renewable energy zone in the central west region prompted the government to think even bigger.

“The New England REZ will be able to power 3.5 million homes and, when coupled with Central-West Orana REZ, sets the state up to become the number one destination across Australia for renewable energy investment,” he said in a statement.

Greenpeace Australia campaigner Elizabeth Sullivan hailed the investment which she described as the “biggest in the state’s history”.

“(It) puts NSW on the path to a clean economic recovery with cheap, plentiful, renewable energy,” she said in a statement.

“The potential gains are almost limitless, particularly at a time when business needs certainty more than ever.”

She added that the plan has been welcomed by locals in the nearby town of Narrabri who continue to oppose a controversial coal seam gas project proposed by Santos.

“This demonstrates that the state’s energy needs can be met without poisoning our land and water with gas projects like Narrabri, bravely opposed by thousands of locals,” Ms Sullivan said.