A million dollar study has been launched, which could see one of the Hunter's newest townships become Australia's first to go completely 'off the grid'.

The Australian Renewable Energy Agency (ARENA) has provided almost $500,000 towards the $1.1 million study into getting the new Huntlee development powered by renewable energy.

Construction has already started on the new township, with 7,500 new homes to be built over the next 25 years.

Danny Murphy from developer LWP said it is a perfect 'blank canvas' for a major new renewable energy project.

"And that's a combination of solar and gas , you need two sources to ensure that there's a reliable supply of electricity at all times," he said.

Brookfield Energy is conducting the feasibility study which should be complete early next year.

Mr Murphy said it will be a major drawcard for residents and is confident renewables can work on a large scale.

"We see Huntlee being an example which can then be applied across all greenfield projects throughout Australia." he said.

Australian Renewable Energy Agency CEO Ivor Frischknecht said if successful, Huntlee could set the pace for renewable development in Australia.

"Doing these kinds of small communities off grid provides a model for what might happen to the network, the one we're all connected to," he said.

"It could tie in with a particular kind of resident, you could turn this into a green community or a lifestyle community."