New Caledonia's government says the energy company NCE will seek fresh tenders to build a new power station in Noumea - needed to also supply energy to the SLN nickel company.
Government spokesperson Christopher Gyges said solar power generation had increased in recent times so plans for a plant using fossil fuel only should be discarded.
Mr Gyges said of all of France, New Caledonia already had the largest solar farm with storage capacity, and the power supply to the non-nickel sector could already be assured with renewable energy.
He called on the nickel sector, which used most power, to embrace the technological advances on both environmental and economic grounds.
Plans for the replacement of the ailing and polluting power plant at Doniambo had been repeatedly reviewed.
Environmentalists urged for coal to be phased out but according to the government, a possible switch to a plant using natural gas only is too costly.
Mr Gyges said the decisions should be made quickly.