AGL's chief operating officer has doubled-down on the importance of gas in the clean energy transition.
It follows a move by the Victorian government to ban gas connections to new homes from 2024.
There is a similar push in NSW, however, premier Chris Minns has ruled out a ban.
The use of gas to generate baseload power is also unpopular among environment groups because of its greenhouse gas emissions.
But Markus Brokhof said gas was essential to sustain the grid during periods of low wind and sun as the clean energy economy matured.
He pointed to the challenges experienced in South Australia, which has a renewable energy penetration rate of 70 per cent. However, a lack of wind and sun at crucial times has resulted in significant generation gaps.
"We believe gas needs to be a transition fuel in the short term," Mr Brokhof said.
"It may change going forward once we have long duration storage technologies in place. But at the moment I don't believe you can run a successful transition without gas. Maybe in the future it will be possible to replace a certain amount of gas with hydrogen but I think there is still a way to go with this."
Mr Brokhof also said it made economic sense to utilise Australia's vast gas reserves during the transition process.
AGL announced plans to build the 250-megawatt peaking plant at Tomago in 2017 as part of a plan of its energy transition plan.
However, the company is yet to make a final investment decision on the $400 million project.
In the meantime, work is progressing on the federal government's 660 megawatt gas peaker at Kurri.
The $1.4 billion project was initially due to be completed by this summer to fill the generation gap left by the closure of Liddell Power Station.
The project, which will eventually be capable of incorporating green hydrogen into its fuel mix, is now scheduled to be complete by the end of next year.
AGL has also announced plans to build a grid-scale battery at Tomago, near the land earmarked for the future gas peaker.
The company lodged a scoping report with the NSW Department of Planning and Environment for the project in April.
The battery, which would have a capacity of 500 megawatts and up to 2,000 megawatt-hours of storage is part of the company's goal to have 5 gigawatts of renewable generation and firming in place by the end of 2030.
The company is also developing another 500 megawatt battery on the site of the Liddell Power Station.
