Manufacturing 2035 adds fuel to the energy debate with federal parliament to resume next week

But the 20-page report was welcomed by the Hunter Business Chamber, which said that COVID had reinforced a need for "sovereign manufacturing capability'.

"Industry needs energy supply that is reliable and affordable in order to remain competitive and ensure our manufacturing sector thrives," chamber chief executive Bob Hawes said.

"There will continue to be a need for firming capacity in the energy market from traditional sources until renewable energy technologies can match the output of thermal power sources - whether that capacity comes from coal or gas will ultimately be determined by the market."

The Manufacturing 2035 report says gas is presently too expensive to be a major source of power-station energy, but it did it not refer by name to the Kurri Kurri plant endorsed by Prime Minister Scott Morrison, with the government-owned Snowy Hydro as a builder and operator.

The government's Liddell Task Force has given the private sector until April to financially commit to building 1000 megawatts of dispatchable power to replace Liddell when it shuts in 2023.

Last year the Australian Energy Market Operator (AEMO) published a 99-page plan for the grid as coal-fired power stations were phased out over the coming 20 years.

Between 14 to 27 gigawatts of coal-fired power would be lost, depending on the speed of change.

The grid would need "six to 19 gigawatts of new flexible, utility-scale dispatchable resources to firm up the inherently variable resources" of the replacement renewable generators.

Manufacturing 2035 says this is "in effect, four to 12 new coal-fired power stations", and calls for a new station in the Hunter as well as one in Collinsville, Queensland, that is the subject of a feasibility study'.

The Liddell task force definition of "dispatchable", however, includes batteries and hydro-electric - including pumped hydro should it work - alongside coal and gas-fired stations.

READ THE ORIGINAL REPORTS:

Labor member for Hunter, Joel Fitzgibbon, described the paper as a political hoax.

"I would welcome the arrival of an investor willing to invest approximately $3 billion in an efficient coal-powered electricity generator in the Hunter," Mr Fitzgibbon said.

"But it's not likely to happen. And if it did, it wouldn't guarantee lower power prices, and alone it wouldn't re-start our car manufacturing industry or save of fuel refineries."

Georgina Woods from Lock The Gate Alliance said the report was "a media release, not a plan, with numbers and ideas plucked from nowhere that will go nowhere".

"It's a public relations tool with a bizarre focus on expensive and polluting coal in a cynical attempt to divide our community because its backers think that will garner them some votes," Ms Woods said.

"The Hunter has manufacturing expertise and skills. We have a cherished natural environment.

"We have a strong community and a will to make a prosperous and sustainable future.

"What we need is for politicians to stop thinking about themselves and their headlines, and start thinking about our future."

Nationals member for Lyne, David Gillespie, said the paper was prepared by the National Party's backbench policy committee.

Dr Gillespie said Australia needed to regain its previously affordable energy prices to rebuild manufacturing.

Asked to respond to the National Party backbench concerns, Industry Minister Karen Andrews said the government had a $1.5 billion "modern manufacturing strategy".

"Making our manufacturers more competitive and resilient, and helping them to scale-up, requires more than just reducing energy costs," Ms Andrews said.

"We must also play to our strengths, innovate and ensure science and technology are working for industry."

"Gas or coal, it's not binary choice," Dr Gillespie said.

"But for Australian manufacturing such as Tomago Aluminium and other major energy users to be competitive - and to avoid further de-industrialisation - cheap and reliable energy around the clock is essential."

Dr Gillespie said new coal technologies could cut greenhouse gas emissions by up to 40 per cent - and more if carbon capture and storage was added - with 8.2 gigawatts of power being lost from the grid through coal-fired power station retirements out to 2035.

"We must plan now," Dr Gillespie said.

"We can't plan, invest and build competitive manufacturing on the hope that some new power technology will arrive."

A spokesperson for the Minister for Energy and Emissions Reduction, Angus Taylor, said the government was "focused on ensuring energy is affordable reliable reliable for households, businesses and industry.

"The key is having the right balance & coal-fired generation is an important part of that mix and will be for years to come," the spokesperson said.

"We need dispatchable generation in the system to balance and complement renewables.

"With gas prices falling and expected to remain low for some time, gas generation represents a key opportunity to ensure NSW has affordable, flexible and reliable 24-7 power."

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