However, Treasury officials said a ban could push electricity prices even higher for consumers already hit with a 13 per cent price rise on July 1 as much-needed new energy would have to come from more costly sources.
It is also likely to add fuel to the fire over the proposed federal super profits tax with the coal industry expected to claim it was being unfairly punished in NSW by such a policy.
There are also fears that any restrictions on coal-fired plants could derail plans to privatise the retail sector of the NSW electricity industry.
The current bidders will be given access to the state’s “data room” from July 1 to assess the value of the sale already estimated to be less than $8 billion. Any restrictions on building new coal-fired power plants could devalue the sale even further.
A Cabinet minute prepared by the Climate Change Department for Environment Minister Frank Sartor and Energy Minister Paul Lynch outlines options for the Government’s clean energy strategy that is expected to form a major plank of the Government’s green election agenda
Mr Sartor said last night: “The NSW Government’s policy is to be fuel neutral in relation to any new power generation.
“It is appropriate that the Government reviews all potential options for future power generation.
“Development of these policies is ongoing and this matter is yet to be considered by Cabinet.”