Dubbo will be the base for a renewable energy zone that the state government says will attract investors.

When completed, the zone is expected to generate around 3000 megawatts of renewable energy and be capable of servicing around 1.3 million homes across NSW.

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The announcement was made on Tuesday morning, with local member Dugald Saunders joined by the Deputy Premier John Barilaro and Minister for Energy Matt Kean.

The state government have pledged $31.6 million to 'lead the way' for investment in renewable energy in the area.

Mr Kean described the zone as a chance for the region to become not only the 'powerhouse' of NSW, but also for the entire country.

"This is a win for this region, this investment will see over $4.4 billion coming into Dubbo and the Central West, and create 450 new jobs in the region, in addition, new opportunities and industries will be created here," Mr Kean said.

"We've already seen an interest in building over 27 gigawatts of new generation into this region, that's nine times more than we'd originally planned for this renewable energy zone.

"This is about planning what the new, modern energy system will look like, starting right here in Dubbo and the Central West, there's absolutely room to increase the capacity."

Mr Saunders said that jobs gained through investment in the project would range across a number of different positions and lengths.

"This means jobs, not only in the short term and the median term, but also in the long term, it means affordable, reliable power, which is something we all want," Mr Saunders said.