One of the state's biggest wind farms is planned in the Central West.
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The proposed development would be built on state forest land at Sunny Corner, north of Oberon.
At about 500 megawatts, it would be bigger than any existing wind farm in NSW and power about 300,000 homes.
The project is a joint venture between Mainstream Renewable Power and Someva Renewables.
"Sunny Corner Wind Farm is a milestone project for NSW and an example of how innovative renewable energy developments can help strengthen regional prosperity," Someva managing director Jamie Chivers said in a statement released on Monday.
A licence to explore has been granted by the NSW Forestry Corporation and a community consultation phase is set to begin.
"We are delighted to have awarded a permit to Mainstream and Someva to investigate a wind farm in Sunny Corner State Forest," Anshul Chaudhary, CEO of the Forestry Corporation of NSW said in the same joint statement.
"After a highly competitive tender process, this will be one of four wind farms to be investigated in a NSW State softwood plantation."
It would dwarf the Flyers Creek Wind Farm, producing more than three times as much power.
A proposed wind farm at Liverpool Range would produce about 1000 megawatts, making it the largest in Australia if built. Work is yet to begin.