Four pilots of the demand response program are being co-funded with the Australian Renewable Energy Agency (ARENA) to free up electricity supply during peak periods over the summer.
The three-year trial will be run across NSW, VIC and SA. Energy Australia, AGL, Flow Power and EnerNOC will participate in the NSW trial.
The trial will deliver 61 MW of spare capacity for NSW and will increase to 80 MW by 2019.
Households and businesses who participate in the trial will be rewarded with batteries and smart appliances.
Minister for Energy and Utilities Don Harwin said the program is another step in ensuring reliable electricity supply for the people of NSW.
“These initiatives will see advanced technologies introduced to thousands of NSW homes and businesses to help them save energy and money,” Mr Harwin said.
The Australian Energy Market Operator (AEMO) will start testing the pilot program next month.