Government bureaucrats have backed calculations by the Australian Energy Market Operator that show a new gas-fired power station would not be needed to compensate for the loss of Liddell power station.
Representatives from the Department of Industry, Science, Energy and Resources told Senate estimates on Tuesday that just 154 megawatts of new generation capacity would be needed in 2023-24 to bridge any supply gap left by the closure of the Hunter Valley power station in 2023.
This is significantly less than the 1000 megawattsthat the government initially said would be needed when it announced its gas-fired recovery strategy in the Hunter last month.
The Prime Minister later revised the figure down to 250 megawatts.
The government has set a tight deadline of next April for the energy industry to prove that it can replace the lost capacity or it will commence construction of a gas-fired power station at Kurri Kurri.
"The Commonwealth government would prefer not to step in. That is not our Plan A. But nor will we shy away from taking action to protect consumers and support jobs, including here in this region and so many like it," Prime Minister Scott Morrison said while visiting the Hunter last month.
Department officials agreed on Tuesday that the Australian Energy Market Operator had forecast a capacity shortfall of just 154 megawatts to meet the 'Interim Reliability Measure' in 2023/24.
Departmental officials confirmed they had never provided advice to the prime minister, or energy minister Angus Taylor, on the 250 megawatt generation gap that Mr Morrison said was necessary to fill a reliability gap left by the closure Liddell power station.
AGL chief executive Brett Redman previously told the Newcastle Herald that he believed the government's proposed gas-fired power plant would not be needed.
This was supported by the Liddell Taskforce report that detailed a series of projects around the country that would replace the power to be lost from the power station's closure.
The Liddell battery project is part of a 850 megawatt multi-site integrated battery system AGL will develop by 2024 as part of its commitments to new sources of electricity supply.
The company also has plans to build a $400 million Newcastle gas-fired power station near Tomago.
The 250 megawatt power station would deliver rapidly dispatchable power for homes and businesses across NSW during periods of high demand.