The City of Sydney council has signed a $440 million deal for what it says will be the nation's first city wide low carbon energy network.

The council has signed the deal with Origin Energy, with hopes the new network will provide 70 per cent of the city's electricity by 2030.

A small number of buildings in the Sydney CBD already use trigeneration - using natural gas or renewable energy to make electricity and to heat and cool the building.

Now there will be a city wide grid linking buildings in four separate locations.

Sydney Lord Mayor Clover Moore says it is an Australian first that will bring multiple benefits, including a halving of greenhouse gas emissions.

"It will mean we will be taken off the coal fired electricity grid, and we'll have our own low carbon grid in the city," she said.

Councillor Moore says a study by the University of Technology Sydney found trigeneration could save electricity users $1.5 billion by 2030.

The figure would include money saved by electricity networks scrapping or delaying plans to upgrade their networks.

"By taking the city of that grid it clearly will reduce energy to the rest of the state, because the costs won't have to be increased to provide energy and that's one of the most significant causes of energy price rises," she said.