Households and businesses are being asked to reduce non-essential power as soaring temperatures trigger an increase in energy demand.
Temperatures topped 40C across parts of NSW on Thursday afternoon, which the energy market operator said could put pressure on power supply, particularly during a peak between 5pm and 9pm.
Sydney airport recorded a high of 40.4C just after 4pm, with the city centre a few degrees cooler. Further west, Penrith topped 39.5C, while Sydney Olympic Park reached a high of 39.4C.
A total fire ban is in place for the greater Hunter and Sydney regions, with an emergency warning issued for three fast moving bush fires east of Cessnock.
Energy Minister Penny Sharpe said electricity supply was not expected to be an issue but the NSW government was considering all measures to help ease pressure on the grid.
"This is a precautionary measure, no one needs to turn off their air conditioning if they need it and the most important thing for people to do is to look after themselves in the hot weather," she said.
"But we are asking households and businesses to think about what they can defer between five and nine o'clock tonight."
Ms Sharpe said people could consider using dishwashers, washing machines and dryers late at night or waiting until Friday morning.
If using air conditioning, the recommended temperature is between 24 and 26C as each degree reduces energy use by an estimated 10 per cent.
"There's not a lot of fat in the electricity system so if things go wrong that's when we get a challenge," Ms Sharpe said.
"So we're preparing for the worst but really hoping that everything will go as well as it can (because) all the preparations are in place and we just have to work with that throughout the day."
The Bureau of Meteorology has issued a heatwave warning for parts of the Northern Territory, West Australia, Queensland and NSW.