AGL is waiting for further details of the recently released NSW energy plan before it makes an investment decision on building a $400 million gas peaking plant at Tomago.
"What we need to see first is the rules of engagement for the NSW energy plan. Once we see that we will be able to make a proper assessment, AGL chief executive Brett Redman said.
The NSW Department of Planning approved the proposed 250 megawatt plant as a piece of state significant infrastructure on Tuesday.
AGL said earlier this month that it would not be in a position to make a final investment decision on the project by the end of April - the federal government's deadline for the energy sector to show that it has the capacity to produce enough dispatchable power to offset the power that will be lost from the closure of the Liddell coal-fired power station.
The government will build a 750 megawatt gas-fired power plant at Kurri if it is not satisfied that the sector can produce enough dispatchable power.
Mr Redman said the government's decision making process relating to the Kurri project would not ultimately determine if AGL proceeded with it's peaking plant proposal.
"We will always take into account all of the other plants that are built or are being built in the system; everything is connected in the way you value an investment decision," he said.
"...I think the main point for our Newcastle project is seeing the NSW energy plan and what it is calling for. I can see a likely future where we seek to bid that (Newcastle) project into that plan."
Mr Redman said the company's decision to sell the nearby Newcastle gas storage facility, which was opened in 2015, was not related to deliberations about the proposed peaking plant.
"What we found having operated it for a few years is that we get good use out of it but we don't use it to its full potential," he said.
"We have taken the view that if we sell it to someone who likes to own infrastructure they will value it more highly because they will be able to sell it to more people.
"We think it will be better utilised by someone else but we will keep using it as an offtaker."
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