But Australian Conservation Foundation spokesman Tony Moore says the current proposal suggests the plant could be several years old before it is fully driven by renewable energy.
"That’s just too little too late," he said. "If we’re going to go ahead with this plan, we need to make sure that it’s 100 per cent renewable energy at the start date."
Mr Moore says the Government should not consider desalination until more efficient ways to use and recycle water are explored.
The Opposition says environmental groups are also concerned saline residue, pumped back into the ocean from the plant, will be harmful to whales.
But Mr Rees has rejected the claim during a Budget Estimates hearing at NSW Parliament House.
He says there is no evidence to support those fears.
"Whales are actually mammals and the notion that the water goes through their gills and into their being is erroneous," he said. "There will be no impact on whales."