Swansea MP Yasmin Catley is backing the Munmorah Power Station site for the 700-megawatt Waratah Super Battery.
Ms Catley has written to Treasurer and Energy Minister Matt Kean, asking him to consider putting the battery at the old Munmorah site.
"He sees benefit in it. Obviously all the infrastructure is there," Ms Catley said.
The government has called for expressions of interest by May 2 for battery developers and sites for the project. An invitation to tender will begin in June.
Mr Kean has described the project as the "largest network battery in the southern hemisphere" that will help "secure the state's energy future, following the closure of the Eraring Power Station".
He recently told Parliament that the government "will go through a competitive process, but it is looking to utilise government-owned sites like Lake Munmorah, as an example".
A Department of Planning and Environment spokesperson added that the Munmorah site "may be made available" for the battery.
The site's coal-fired power plant was demolished in 2017, with hundreds watching as the twin 155-metre high chimney stacks fell.
Generator Property Management [GPM] - a state-owned business - has been investigating future uses for the 700-hectare Munmorah site. The contaminated site is being remediated to enable new development.
GPM managing director Stephen Saladine said GPM was in close contact with the state-run EnergyCo, which is co-ordinating where renewable projects will be built.
GPM is co-operating with EnergyCo "should proponents wish to use the Munmorah site for the location of the Waratah Super Battery", or if development consent was needed "to fast-track development of the battery".
"The site remains a well known location for potential developments and has been identified as a well-placed zone for utility-scale batteries," Mr Saladine said.
"These developments will be driven by interested parties, not by GPM."
Ms Catley supports the battery plan at Munmorah, but said "there has to be more than renewable energy".
"It's the jobs that we need. We know that battery will only provide 10 to 14 ongoing jobs. That's not enough."
She wanted the site to become a jobs hub for energy and manufacturing, including hydrogen opportunities.
The Munmorah site stands as a test case for the future of land that housed old coal-fired power plants.
Ms Catley said it was time to start speaking to the community about options for the site.
"It's still being rehabilitated as we speak. It's in reasonable shape, but they're toxic environments in truth.
"They won't be building houses or a prison on it."
Development can't be too close to the Colongra Gas Generation Plant, a 667MW gas-fired power station that remains on the site
Ms Catley said the buffer zone around the power station site must be kept.
Mr Saladine said GPM was in discussions with the NSW Environment Protection Authority, regarding "the continuing remediation of the site and surrounding lands".
