AGL will not make final investment decision on Tomago peaking plant by federal government's April deadline

The government set the deadline last September when it announced it would back the construction of the Kurri plant if the energy industry could not demonstrate how it would replace the 1000 megawatts that will be lost from the closure of Liddell power station in 2023.

Despite unprecedented investment in renewable energy generation in recent years, the government argues that there has not been a new dispatchable generator built in NSW in over a decade.

It will make a final decision about the Kurri plant following the April 28 deadline.

"We are serious. If the private sector doesn't step up, we will step in," Energy and Emissions Reduction Minister Angus Taylor said on Friday.

"Households and businesses can't afford energy policies that put at risk investment in existing and new reliable generation needed to keep energy prices low and the grid secure.

"Independent modelling shows that if not replaced, following the exit of Liddell, wholesale prices could rise by 30 per cent in two years, and continue rising to hit $105 per megawatt hour by 2030."

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AGL announced plans to build the 250-megawatt peaking plant at Tomago in 2017 as part of a plan of its energy transition plan.

But it put work on the project on hold late last year a result of the state government's Energy Roadmap.

Energy Australia has also cited the NSW roadmap a factor in its decision to delay a final investment decision on its proposed $300 million Tallawarra B gas power station on the NSW south coast.

AGL is yet to indicate when it will make a final investment decision on the Tomago peaking plant.

"The required project approvals at a state and federal level are proceeding so that the project is ready should the operating environment require it," a spokeswoman said.

"We are continuing to work closely with the Federal and NSW Governments on how to support the energy market and deliver new generation."

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Paterson MP Meryl Swanson, who was briefed on AGL's plans on Friday, accused the government of failing to support local industry efforts meet energy needs.

"AGL had a clear plan to deliver the extra energy needed through a (Tomago) peaking plant and this government have put this in jeopardy," she said.

"The NSW Liberal government and the federal Liberal government can't even work together on energy policy to ensure outcomes for the sector."

The proposed Kurri plant was declared as Critical State Significant Infrastructure in December.

It is estimated the plant could be operational by mid-2023 if the government announces it will proceed with the plant shortly after the April deadline.

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