The NSW government has agreed to a 20-year energy supply deal to ensure wind turbines will power Sydney's desalination plant.
Premier Morris Iemma said the deal would link Sydney Water to the Babcock and Brown-backed Capital Wind Farm being built at Bungendore, near Queanbeyan in southern NSW.
"I always said the government would insist the desalination plant will be powered 100 per cent by clean green energy and today we're delivering that," Mr Iemma told reporters in Sydney.
"This will be Australia's biggest accredited renewable energy contract."
The contract requires Sydney Water to purchase a minimum 180,000 Renewable Energy Certificates (RECs) every year for 20 years.
Each REC represents one megawatt hour of green electricity, which will be used to power the desalination plant.
In times when the state's dams are full and the desalination plant is not in use, Sydney Water can on-sell its RECs for a possible profit.
At current market rates, the contract will cost taxpayers about $9 million annually to buy the RECs plus a further undisclosed amount for the electricity.
The electricity will be purchased at a set price, adjusted for CPI, over the 20 years.
Mr Iemma said negotiations on the finer points of the contract were continuing, but it would soon be formally signed.
The desalination plant is under construction at Kurnell, in Sydney's south, and is intended to supply up to 250 million litres of drinking water a year from the summer of 2009-2010.
