AGL will invest $190 million to ensure Bayswater coal-fired power station continues to operate efficiently over the next 12 months as the electricity grid reaches a critical juncture of the energy transition.
It follows a $120million overhaul of the plant's Unit 1 in recent months ahead of the peak summer demand period.
In this month's Summer Readiness report, the Australian Energy Market Operator (AEMO) warned of an increasing risk of blackouts, and forced power outages across the country.
It has taken the extraordinary measure of using the costly contingency measures at its disposal, which include seeking contracts for additional supply.
Bayswater, which supplies about 20 per cent of the state's energy requirements, is scheduled to continue operating until as late as 2033.
And with the future of Lake Macquarie's Eraring power station uncertain beyond 2025, the 2640 megawatt generator is likely to play an increasingly vital role in suring-up the grid over the next decade.
"As our thermal plants reach the end of their operational life and progressively close by 2035, it's important we continue to maintain these assets to assist to provide system security as we also target 12 gigawatts of new renewable and firming capacity by 2035," AGL chief operating officer Markus Brokhof said.
"Our yearly maintenance program and regular investment in our thermal and renewable assets aims to increase the availability, reliability, and flexibility of our assets so they can respond to the peaks in customer demand throughout the year."
The works at Bayswater unit one involve inspecting and testing the boiler units to ensure they are free from corrosion, refurbishing the turbine to ensure it can run at maximum capacity, rewinding the 37-year-old generator.
Hundreds of other smaller components will also be inspected and repaired.
This 110-day project is also providing a boost to the local community with 800 additional contractors involved in the planned outage works.
AGL will invest more than a $1 billion in capital and operational expenditure to maintain its national portfolio of generation assets this year.
It will also add 300 megawatts of new flexible generation into the national electricity market with the Torrens and Broken Hill batteries.
In addition, the company is expected to make a final investment decision on 500 megawatt battery megawatt Liddell Battery by the end of the year.
The project is part of the company's plans to transform the former Liddell coal-fired power station site into a clean energy hub that will also feature a $1 billion-plus portfolio of industries including agriculture, clean energy and firming technologies, composting, coal ash recycling, green metals and advanced manufacturing.
Elsewhere in the Hunter, plans for a 500 megawatt lithium ion battery a Tomago are also on public exhibition.
AGL is also carrying out specific summer readiness measures to reduce the fire risk at operational sites.
Summer preparedness includes vegetation control, establishment of earth fire breaks, regular training of staff and emergency response teams, and testing of fire response equipment.