AGL will today announce a $25 million upgrade of the Loy Yang A power station which the company claims will lead to "more efficient generation" and "create local jobs".
AGL Loy Yang general manager Nigel Browne said the Unit 2 Turbine Project would increase generation capacity by 15 megawatts and improve efficiency without increasing coal consumption or emissions.
He said the work was scheduled to be completed during the next major maintenance program on the second unit in 2020.
"This project involves replacing low pressure turbines and feedwater heaters," Mr Browne said in a statement yesterday.
"They will be installed as part of the maintenance program scheduled in 2020 which is expected to create about 100 jobs for contractors and sub-contractors."
The company said many of the contractors and sub-contractors would be from Gippsland and would include former workers from Hazelwood Power Station.
"This is additional to AGL Loy Yang staff who are involved in these projects," he said.
Mr Browne said the additional generation capacity would help fill a reliability gap in the Victorian electricity market forecast by the Australian Energy Market Operator from 2022 onwards.
"This project will help to address that shortfall while improving efficiency of the Loy Yang A station and creating local employment," he said.
Loy Yang is expected to close no later than 2048.