The Greens say AGL's decision to close all coal fire power stations, including two in the Upper Hunter, is the beginning of the end of fossil fuel consumption in Australia.

The energy giant released a greenhouse gas policy on Friday pledging to close all of its existing stations by 2050.

That includes the Liddell and Bayswater plants near Muswellbrook, which it only purchased last year.

The Greens' Regional Renewable spokesman Jeremy Buckingham said AGL had seen the writing on the wall.

"It's a fantastic move in the right direction. This is the beginning of the end for fossil fuels," he said.

"All major electricity generators and retailers need to take heed of this move by AGL. This is the end for fossil fuels in Australia."

AGL has faced angry backlash over its coal seam gas plans in Gloucester over recent years.

Mr Buckingham said AGL should de-commission the Gloucester project as well, to show it is serious about so-called "de-carbonising" electricity generation.

"This is clearly putting in place the framework to drop the Gloucester coal seam gas project," he said.

"The New South Wales electorate does not want coal seam gas. AGL now has the framework to drop this industry and go with more solar."