AGL Energy is finalising a development application for a $400 million 250 megawatt gas-fired power station project at Tomago.
The company expects to lodge an environmental impact statement for the project, to be built near the existing Newcastle gas storage facility at the corner of Old Punt Road and the Pacific Highway, with the NSW planning department in mid-November.
A spokeswoman said the project was consistent with the company's move to a renewable energy mix.
"Peaking gas power, like the proposed quick-start gas generation plant at Newcastle, can be turned on during peak demand periods or whenever renewables aren't available," she said.
The power station will comprise either reciprocating engines and/or gas turbines, fast start operation with the primary role of providing firming capacity to the energy market.
The station will have duel-fuel capability, using both natural gas and diesel fuel as back up.
The station will also be capable of operating at full capacity within five minutes, providing a rapid response to changes in renewable generation supply.
While the Tomago plant would be relatively small compared to the ageing Liddell power station, which can generate 2000 megawatts, AGL is promoting the gas-fired power station project as part of a broader generation plan submitted to the federal government and the Australian Energy Market Operator in December 2017.
In another renewable initiative, AGL announced in August that it had signed an agreement with Idemitsu Australia Resources to undertake an engineering feasibility study for a proposed 250-megawatt pumped hydro project at Bells Mountain, near Muswellbrook.
The agreement follows on from an initial concept study which explored the viability of utlising the void on the Muswellbrook Coal Company site, which is no longer being mined and is suitable for the proposed project.