A thick sludge made from food scraps will help generate power at a NSW wastewater plant, as part of a trial that could lead to the renewable energy technology being used elsewhere in the state.
It's thought more than 60 per cent of the Cronulla Wastewater Treatment Plant's energy needs will be generated by technology which depends on pulped fruit and vegetable scraps mixed with sewage to create methane gas.
The plant already generates about 50 per cent of its power but the food sludge will give the current process a boost.
"The energy that we save here (the 60 per cent) would be equivalent to the energy that about 800 to 1000 homes would use every year," Environment Minister Mark Speakman told AAP at the launch of the three-year trial on Monday.
"If this works here ... we'll look at rolling it out elsewhere up and down the coast of NSW."
Wastewater treatment is energy intensive and the NSW government says the trial is part of a push to help lower power bills.
Sydney Water energy manager Phil Woods says the plant may one day become a supplier of electricity.
"Further down the track ... (with) the potential to take on more waste we could be a net generator of electricity and be exporting to the local network," he told AAP.
A Sydney business will supply the waste from grocers who use their food pulpers.
The NSW government says the trial will save 150,000 wheelie bins of fruit and vegetable scraps from going into landfill every year, as well as take trucks off the road.
It comes less than a week after a Climate Council report gave NSW the worst renewable grading out of the states.
Falling "percentage of renewable electricity, low large-scale renewable capacity per person, no renewable energy target and low levels of rooftop solar", were listed as reasons for the poor rating.
But Mr Speakman said the report failed to consider the hydro electricity the state generates.
"When you do that ... NSW is faring better than Victoria and Queensland - the other two major states," he said.
Solids left over from the food and sewage power process will be used to create agricultural fertilisers.
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