The Federal Government insists its $610 million gas-fired power station at Kurri makes economic sense even though it will only run on average for about two per cent of the time.
An environmental impact statement shows the project will create about 250 jobs during construction and 10 ongoing full time jobs.
It is also likely that the 750 megawatt generator will run on diesel fuel only for at least six months at the end of 2023 until a permanent connection to the Sydney-Newcastle gas pipeline is complete.
The Federal Government has consistently argued that the plant is needed to fill a shortfall in dispatchable capacity that will be caused by the closure of the 1000 megawatt Liddell Power Station in 2023.
"We have always said our response will be shaped by the extent of industry action to deliver on the target. The Government will take the time to consider private sector commitments including the 316 megawatt Tallawarra B gas project," Energy Minister Angus Taylor told the Newcastle Herald.
"Independent modelling shows if Liddell closes and is not replaced, NSW average wholesale prices could rise by 30 per cent to around $80 per megawatt hour in 2024; and continue increasing to $105 per megawatt hour by 2030."
The 358-page EIS reveals the peaking plant, which would be used to fill shortfalls in the electricity supply, would operate at a "capacity factor" of about two per cent.
The project's proponent Snowy Hydro 2.0 seeks to use diesel fuel for up to 175 hours a year in the normal operations, and gas for around five times that much.
"The Proposal is seeking approval for a capacity factor of up to 10 per cent on natural gas and up to two per cent on diesel in any given year. However, it is expected that likely operations would result in a capacity factor of 2 per cent in any given year," the EIS says.
An EIS for the pipeline component of the project, which is expected to create 350 construction jobs, is yet to be released.
This week's budget did not allocate funding for the Kurri generator, fuelling speculation that it is contained within $3.8 billion worth of decisions taken but not itemised.
Federal Labor Paterson MP Meryl Swanson urged the Government to "get on with it"
"This project could be a game-changer for local employment and the Hunter deserves this opportunity," she said.
"If this Prime Minister cared about the residents of my electorate he would spend real time talking with locals and the first thing he'd learn is locals want jobs and opportunity."
The public exhibition period for the project closes on June 9.
Dr Madeline Taylor, an expert in energy and natural resources law at University of Sydney's Environment Institute, called for an extensive community consultation process.
"The Kurri Kurri gas-fired power station is a proposal in which the public has a vested interest," Dr Taylor said.
"The Government is proposing to build and fund a new gas power station in a move not seen for decades, by intervening directly in the gas market, and it is crucial communities are heard".
Environmental groups have slammed the project.
"No matter which way you look at it, this project is a colossal mistake and a waste of taxpayer money," Tim Baxter, Climate Council senior researcher said.
"Energy, economics, science and health experts all agree NSW does not need a new gas power station, and the Federal Government should not be wasting public money on one.
"Gas is a fossil fuel that is hazardous when burned in the home, and is driving dangerous climate change, which is already affecting Hunter communities by exacerbating bushfires, heatwaves, droughts and floods.
Lock the Gate Alliance said the project would embolden gas companies to expand and build new gas fields and pipelines.
According to the plant's EIS, the plant would produce about 14.8 million tonnes of greenhouse gas emissions over its lifespan.
This does not include fugitive emissions released when the gas which is sent to the power station is mined.
"We fear the Morrison Government will use smoke and mirrors to turn this polluting and expensive power plant into the showpiece of a fossil-fuel powered election campaign," spokeswoman Georgina Woods said.
"But it is clear from this EIS this power plant would be built at the detriment to many and the benefit of a select few."
