Plans for a 252-megawatt gas-fired electricity plant near Newcastle have been unveiled today by AGL.
The $400 million project will consist of 14 reciprocating engine units capable of generating 18 megawatts of energy each, with construction set to be complete sometime in 2022.
AGL is currently assessing sites for the project, but it's expected to be located near the energy giant's Newcastle Gas Storage Facility in Tomago.
Federal Energy Minister Josh Frydenberg has expressed concerns the new plant will not make up for a 1600 megawatt defecit created by the closure of Muswellbrook's Liddell coal-fired station.
Mr Frydenberg is still pushing for AGL to sell-off the ageing site to Hong Kong-based rival, Alinta, before it shuts down in 2022.
However Managing Director and CEO of AGL, Andy Vesey said the company is committed to filling the void leftover while also supporting Australia's transition to renewable energy.
"It's a three-phase plan which, at its completion will have reduced the impact of the closure of Liddell - providing NSW with reliable, affordable and sustainable energy for decades," Mr Vesey said.
He said AGL has given the government seven years' notice and now wants to push forward with the first phase of the NSW Generation Plan.
"This is a plan which [the Australian Energy Market Operator] reviewed and said if implemented," he continued, "will eliminate the impact of the closure of Liddell."
Parliamentary Secretary for the Hunter, Scot MacDonald said the NSW government is looking forward to receiving a development application for the program soon, as it aligns with their future energy goals.
"The Berejiklian government has been one of the early adopters of the National Energy Guarantee," Mr MacDonald said.
"...This is what we've been looking for; it's saying to the market, if we give you the guidelines and the certainty you can go out there and make that capital investment that we're looking at here."
The Newcastle project comes in conjunction with a similar 210-megawatt gas plant in South Australia and a collective 653-megawatt renewable focus through wind farms in Queensland and NSW.
Stage One involves the Tomago plant announced today, an efficiency upgrade to the Hunter's Bayswater Power Station and an agreement for AGL to offtake 300 megawatts of solar capacity from the Sunraysia Solar Project by Maoenang Australia.
Stages Two and Three involve further projects necessary under commercial and industrial demand, and are subject to Board approval.
|A similar AGL station under construction in South Australia. Image: SMH.|