A decision by energy provider AGL to upgrade a coal-fired power station in the NSW Hunter Valley has been lauded by the state government.
The $200 million upgrade to Bayswater Power Station in Muswellbrook will create 90 jobs and is estimated to add another 100 megawatts to the network, according to AGL.
NSW Energy Minister Don Harwin says AGL's investment will "play an important role in our energy security".
"The NSW government welcomes new investment in electricity generation to boost supply and bring down power prices," Mr Harwin said in a statement on Wednesday.
AGL Macquarie general manager Kate Coates argues by replacing the original turbines with more modern technology the station will be able to generate the extra energy using the same amount of coal.
"This extra electricity supply will be generated without the need for additional coal use and therefore without additional emissions," Ms Coates said.
Federal local Labor MP Joel Fitzgibbon describes the investment as "good news".
AGL's commitment to prolonging coal-fuelled energy did not mean investment in other technologies would be put on the backburner, Mr Fitzgibbon told ABC radio on Wednesday.
"They are very serious in, as soon as they possibly can, investing in renewable technology as well."