The NSW government will hand out $275 million in clean energy manufacturing grants as it seeks to shore up delivery of the state’s renewable energy zones and bolster domestic supply of new renewable energy.

On Monday, the Minns government will announce a new Net Zero Manufacturing Initiative which it says will offer funding for small and medium-sized businesses to pilot new clean energy technology.

The grants are aimed at renewable manufacturing including solar energy and innovation in battery technology and measures to help businesses get scalable low-emission technologies market-ready.

“This is all about supporting and backing NSW businesses, manufacturers and innovators to develop homegrown technology and products right here in the state,” Premier Chris Minns said, arguing the grants would help create “the jobs and skills we need for a renewable energy future”.

The focus of the grants will be “lab-proven technologies and the manufacturing of market-ready products that are ready to be scaled-up and rolled out across NSW”.

The Minns government has legislated to reduce NSW carbon emissions by 50 per cent on 2005 levels by 2030, but has faced pressure from clean energy groups over its decision to negotiate with Origin Energy over the possible extension of the Eraring coal-fired power station beyond 2025.

That decision is partly due to an energy reliability gap. A government-commissioned report last year found there was a possibility not enough new renewables would be in place to match demand if Eraring closed as scheduled.

Experts disagree about the size of the reliability gap – and whether an extension of Eraring is necessary. The government has simultaneously invested $1.8 billion in a range of renewable energy measures including community batteries and pumped hydro to help the grid stay reliable.