Chinese-backed plans to build a massive new coal-fired power plant in New South Wales are reopening hostilities in the so-called climate wars.

Key points: The Coalition and Greens are at odds over plans to build a coal-fired plant in the Hunter Valley

The Coalition and Greens are at odds over plans to build a coal-fired plant in the Hunter Valley The planned plant would generate more energy than the nearby Liddell power station

The planned plant would generate more energy than the nearby Liddell power station Chinese state-owned CEEC, which has built power plants in Pakistan, India and Indonesia, is backing the project

The Greens say a "veritable army" is ready to stop the plant from being built.

But Coalition backbencher Craig Kelly calls the plan "fantastic" and is urging Prime Minister Scott Morrison to pour taxpayer subsidies into it.

"This is exactly what the market needs," Mr Kelly said, adding competition from the new plant would lower power prices.

"If the Government needs to underwrite it, if it needs a little bit of help, then that's what we should be doing."

Greens energy spokesman Adam Bandt says the plan is "madness".

"It will make the Franklin Dam campaign look like a Sunday picnic," Mr Bandt said, referring to the successful movement in 1983 to stop a dam being built in the remote Tasmanian wilderness.

"We just had our hottest summer on record. If Labor or Liberal [parties] give this project the tick of approval then you will see civil disobedience in Australia on a scale never seen before."

Greens MP Adam Bandt has said his party will fight the plans. ( ABC News: Dylan Anderson )

The political tensions revolve around revelations the massive Chinese state-owned China Energy Engineering Corporation (CEEC) plans to build 2000MW of new coal generation in the New South Wales Hunter Valley, north of Sydney.

Cessnock council's director of planning and environment Gareth Curtis told the ABC the council has been briefed about the proposal, but state planning procedures would take many months before any potential approval.

He confirmed a failed industrial zone had been nominated as the site for the building of twin 1000MW plants utilising high intensity, high efficiency coal-fired technology.

The planned generation capacity would exceed that of the aging Liddell power plant, located some 80 kilometres away and due to close in 2022.

The proposed plant would generate more energy than the nearby Liddell power station. ( Wikimedia Commons )

The Federal Government's Foreign Investment Review Board is likely to take an interest in the company behind the deal.

CEEC is reportedly a key investor in one of China's largest military-civil investment vehicles and recently signed an energy and infrastructure deal with Egypt's military ministry.

Boasting 160,000 employees, CEEC built China's famous Three Gorges hydroelectric project.

In more recent times it's constructed a nuclear power plant for Pakistan and several coal-fired power stations in the India, Indonesia, Ghana and Vietnam.

Chinese President Xi Jinping officiated the opening of two projects in the Philippines, indicating a close link between the Chinese leadership and the company.

Energy Minister Angus Taylor's office issued a statement saying it was aware of the deal but declining further comment.

Shadow environment minister Mark Butler voiced opposition to the plans in a statement of his own.

"Labor's long standing position is no taxpayer money should go to subsidising new coal power, and no carbon risk indemnity, which could cost taxpayers up to $17 billion, should be provided," he said.

"All the advice we've received says new coal plants are more expensive and can't compete with firmed renewables to deliver dispatchable power."