AGL to build $400m gas-fired power plant

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AGL Energy will spend up to $ 400 million to build a new gas-fired power plant near Newcastle in NSW as it pushes forward with plans to shut down its aging Liddell coal-fired power plant.

The energy company says it is considering sites for a 252 megawatts electricity plant near AGL's Newcastle gas storage facility, which is expected to be part of the deficit following the closure of Liddell in 2022.

AGL CEO Andy Vesey said The Australian Energy Market Operator (AEMO) had confirmed that the new power plant will address the capacity course that may arise as a result of the Liddell closure.

"AGL is committed to supporting the orderly transition of Australia's electricity generation capacity to modern, clean and reliable energy supply." Vesey said.

"Therefore, we gave seven years' notice of when we intend to close Liddell power plant in late 2022, and we are pleased to commit to building the power plant near N ewcastle."

AGL is also planning to add 100 megawatts to its Bayswater power station, has agreed to purchase over 300 megawatts of capacity from the Sunraysia solar project and said it will continue to assess the potential for developing another 500 megawatts of gas-fired generation capacity.

The Sydney-based company to publish the new factory in Newcastle on Friday is under pressure in recent months by the federal government over its decision to close Liddell Power Station

Treasurer Scott Morrison has previously called on AGL to consider an offer from Alinta Energy to buy the NSW plant that echo calls from the prime minister who wants the station to remain open until 2025 when Snowy Hydro 2.0 is online to make sure that

On Friday the Federal Minister for Energy welcomed Josh Frydenberg plans for the new plant, but said that it will only be part of the shortcoming created by the Liddell factory shutdown.

In addition to the new power plant due to completion in 2022, AGL has also commenced construction of 210 megawatts of gas-fired generation in South Australia and 653 megawatts of wind farms in Queensland and NSW.

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