A plan to shore up New South Wales's energy supply has struck turbulence amid concerns about aircraft safety.

Key points: The Civil Aviation Safety Authority says plans for a new gas turbine near an airport are unsafe

The Civil Aviation Safety Authority says plans for a new gas turbine near an airport are unsafe EnergyAustralia is now assessing its options for the plant south of Wollongong

EnergyAustralia is now assessing its options for the plant south of Wollongong The power station has been earmarked as a potential replacement for the ageing Liddell facility

With the looming closure of the Liddell power plant, EnergyAustralia has explored the option of adding an open-cycle gas turbine at its Tallawarra power station, south of Wollongong.

But the Civil Aviation Safety Authority (CASA) objects to the plan on the grounds the resultant gas plume presents a risk to aircraft flying in and out of the Illawarra Regional Airport at Albion Park.

CASA spokesman Peter Gibson said EnergyAustralia's offer of declaring a flight danger area above the plant did not satisfy the concerns around turbulence and visibility.

"After looking at it carefully, our determination was that putting a danger area around the gas plume would certainly keep aircraft out of the area," Mr Gibson said.

"But the knock-on effects weren't really acceptable."

Where to from here?

A spokesperson for EnergyAustralia said in a statement the company was informed that CASA had rejected its proposal last week.

"Now we are considering the implications of this determination and assessing our options," the spokesperson said.

They said the danger area proposal was the same approach used for other open-cycle gas turbines close to airports, including near Bankstown Airport.

It comes as AGL resolved to defer the closure of the ageing Liddell facility by around six months to April 2023 as a precaution against potential blackouts.

EnergyAustralia said it was assessing the prospect of expanding Tallawarra in anticipation of Liddell's retirement.

But Tallawarra has a history of dropouts in times of high usage, most recently in January 2018.