AGL Energy has unveiled plans to transform its Liddell coal power generation site in NSW into a giant electricity storage facility as it embarks on a target to install 850 megawatts of large-scale batteries within four years.

The 500 MW battery proposed for the Hunter Valley – to be installed in stages – would be one of the largest storage systems in Australia, and would represent a radical conversion of the site from one that hosts one of the country's most carbon-polluting baseload generators to one designed to release stored energy on demand in an increasingly renewables-dominated grid.