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Gas before nuclear 'thought bubble' as coal reign ends

Federal opposition plans to roll out nuclear energy have been dismissed as a thought bubble as the nation races to replace coal power.

Alternatives to the fossil fuel - which still powers much of the grid in NSW, Victoria and Queensland - are being rapidly rolled out with coal's reign "swiftly ending," according to electricity company bosses.

Proposals to increase natural gas supplies for the nation's most populous state are being assessed and welcomed as renewable projects come online, NSW Energy Minister Penny Sharpe says.

"We don't want to see price spikes and we don't want to see uncertainty for industry," she told a Committee for Economic Development of Australia event on Tuesday.

NSW Climate Change, Energy and Environment Minister Penny Sharpe
Penny Sharpe has acknowledged there's a tight balance between energy supply and demand in NSW. (Dan Himbrechts/AAP PHOTOS)

A tight balance between supply and demand was a "new normal" NSW did not like.

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More gas-powered plants would be needed to cope with peak demand during the transition to renewable energy sources, she said.

"More and more renewable energy is entering the system, but it's always happening more slowly than we would like," Ms Sharpe said.

The state Labor minister said she was "unimpressed" by a proposal from the federal coalition to roll out nuclear power stations.

The plan posed too many important but unanswered questions and threatened to smash a hole in the certainty provided by the state's energy strategy, she said.

"NSW will not be risking our future economic prosperity for a policy thought bubble designed to play politics," Ms Sharpe said.

Opposition Leader Peter Dutton unveiled plans in June to build seven government-owned nuclear power plants across five states if the coalition wins the next federal election.

Nuclear bans are in place in most states and territories, measures that would need to be overturned or circumvented before the rollout could take place.

The chief executive of Australia's largest energy generator and greenhouse-gas emitter reaffirmed nuclear power was not part of the company's future.

AGL's Damien Nicks told the same event the electricity supplier focused on renewable generation and storage.

Damien Nicks, Managing Director and Chief Executive Officer of AGL
Damien Nicks says in a decade AGL won't be generating electricity from coal. (Dan Himbrechts/AAP PHOTOS)

"AGL's generation portfolio will look completely different by 2035, when we're no longer generating electricity from coal," he said.

Transgrid chief executive Brett Redman, whose company operates NSW and ACT transmission networks, commended the NSW government's May decision to extend the life of the nation's largest coal-fired power station at Eraring.

But he warned the move could not be repeated as energy systems were reconfigured.

"Further deferrals are neither physically nor commercially desirable given the investment necessary to keep the ageing assets operational," he said.

"The trajectory is clear: coal, long a stalwart of our energy generation, is swiftly ending.

"Simultaneously, our energy demand is skyrocketing."

The transmission network operator is building 2500km of new lines to carry an expected 17-gigawatt surge in renewable generation as more projects enter the grid.

Ms Sharpe on Tuesday announced the inaugural chair and seven commissioners for the state's Net Zero Commission.

The commission was created in December and will report to the government on its progress towards legislated emissions-reduction targets, including a goal of net-zero emissions by 2050.

Former NSW Treasury secretary Paul Grimes has been appointed chair, after joining the commonwealth's Emissions Reduction Assurance Committee in April.