The anticipated closure of all 35 of the state's operating thermal coal mines over the next two decades and the loss of thousands of jobs highlights the need for government action, a NSW parliamentary inquiry has been told in multiple submissions.

Singleton Shire Council has sounded the alarm about the reliance of its economy on mining, making it "highly susceptible to resource market trends".

"Action is required to identify industry diversification opportunities, avoid land use conflicts, promote a mix of land use outcomes, investigate emerging opportunities and develop strategic long term post mining land use outcomes," the council said in a submission to NSW parliament's Sustainability of Energy Supply and Resources inquiry.

In an upbeat submission the Port of Newcastle said the region was almost uniquely placed to refer to the recent past as a way to see the opportunities available for a region transitioning away from coal.

"The closure of BHP's local steelmaking operations 20 years ago, while traumatic, triggered an economic and social awakening that is still playing out today. The closure was a major milestone in a long-term shift away from a reliance on steel manufacturing," Port of Newcastle chief executive Craig Carmody said.

BHP's Hunter peak employment of 11,000 had dropped to 4500 direct and indirect jobs when the steelworks closed in 1999. Although there were fears the 10.4 per cent unemployment rate would surge, by 2011 it was at 4.6 per cent, Mr Carmody said.

"The BHP closure had forced the region to diversify and is credited for putting the Hunter in good stead during the global financial crisis less than a decade later. Newcastle is justifiably proud of this extraordinary transformation. But it did not happen automatically through the 'invisible hand' of the market.

"Leading up to the BHP closure, business leaders, unions and the community worked together on a transition plan. There was a shared commitment not only to identify new employment pathways for steelworkers but also to map out future areas of competitive advantage for the region.

"Changing circumstances require the region to once again prepare for another transition, this one possibly even more fundamental and far-reaching than the last."

Lock the Gate Alliance told the inquiry that preparation and public dialogue were crucial to avoiding social and economic damage from coal decline.

"NSW's three main coal customers buy three-quarters of our coal, and are moving towards renewable energy generation at an unprecedented pace. This will hurt coal communities in the regions hard. Global research has shown that early preparation and transparent and consensus-based inclusion of communities in that preparation offers the best chance of avoiding the curses of structural adjustment," Alliance spokesperson Georgina Woods said.

The inquiry has received more than 200 submissions, with many urging greater government support for the Hunter region.

The Institute for Energy Economics and Financial Analysis said coal demand growth in smaller electricity markets in South Asia would not be enough to make up for the decline in the big four thermal coal markets of Japan, China, South Korea and Taiwan.

While thermal coal exports peaked in 2014 but the approaching decline "will not happen overnight".

"There is still time for policy makers to prepare for the coming transitiion in order to plan for the inevitable social and economic consequences," institute analysts Simon Nicholas and Tim Buckley said.

"At its heart this will be a technology transition and is hence unavoidable. It will happen whether policy makers want it or not. A lack of planning will result in a chaotic transition with significantly negative social and economic impacts."

Lake Macquarie MP Greg Piper told the inquiry global shifts away from coal left his area, with coal-fired power stations and a number of mines, one of the parts of Australia exposed to a risk of "severe economic impact, job losses, and of becoming littered with stranded assets".

"We must start preparing these communities for that transition. While the local coal industry will be reasonably well served over the short term, traditional coal communities and economies will not survive the long term unless they are significantly diversified," Mr Piper said.

"Without building capacity in coal-dependent communities such as Lake Macquarie, Newcastle and the Hunter Valley, I believe there is a real and very significant risk of economic disruption or even collapse.

"There is enough evidence to suggest this region's coal industry will survive the next decade, but it will likely not survive the next two decades if the global market continues to shift in its current direction, and at its current pace, with or without major changes in thinking on climate change," Mr Piper said.

"A transition plan for communities which rely on the coal industry must start now or they risk being stranded."

NSW Parliament's committee on environment and planning is considering the capacity and economic opportunities of renewable energy; forecasts for energy and resource markets; effects on regional communities and opportunities to support sustainable economic development.

Committee chair Alex Greenwich said an important part of transitioning to renewable energy sources is minimising the disruption in affected communities.

The committee will announce public hearing dates.