AGL won Planning and Assessment Commission approval for its $1.5 billion plant, churning out up to 1000 megawatts of electricity, in July 2012.

The development, to be located on a 573 hectare property four kilometres north of Dalton, came amid a storm of community controversy and questions about its need. In October 2012, the company announced it was suspending all work, citing falling electricity demand due to higher prices, network upgrades, lower business activity and more efficient appliances. Now it’s having a re-think.

AGL has applied to the NSW Department of Planning and Environment to extend the approval for a further two years. It would have lapsed on June 30.

“As Australia moves increasingly towards renewable energy, we must also ensure we meet our baseload energy requirements, particularly at times of peak energy demand,” an AGL spokesperson said.

“That's why AGL is taking another look at the potential to pursue the gas-fired Dalton Power Station, to contribute to secure energy supply.”

The company’s project director Nigel Bean said the market landscape had since altered significantly as Australia transitioned to a carbon constrained economy. As such, AGL had lodged an extension application, allowing to time to consider if the station was required.

“The energy landscape has changed and ensuring secure, reliable and affordable energy supply for the state is a priority,” he said. “The proposed Dalton Power Station provides an option for AGL to help NSW meet peak demand and manage its energy security.

The Dalton Power Station has been designed as a peaking plant so it could add additional generation capacity to the grid as more supply is needed. Also, gas fired turbines operating in an open cycle arrangement are a very effective method of complementing intermittent renewable generation sources.”

Mr Bean said the two-year modification would enable AGL to review the proposed power station in line with new technologies and energy market conditions as well as consult with the local community, landholders and other stakeholders about their views on any potential project.

But president of the Upper Lachlan Environment Association, Phil Waine, vowed another strong campaign against the development. Residents opposed the project on the basis of amenity impacts, noise, dust, groundwater effect and construction truck numbers, among other aspects, in 2012.

“There was a lot of angst last time and there will be just as much noise this time,” Mr Waine said. “If anything, people are better informed. There is a lot of opposition to it and we’ll be doing everything we can to prevent it happening.”

Mr Waine only “heard a rumour” about the revived plan on Wednesday. Public submissions on the plan close on March 31.