AGL's 50-year-old Liddell power station plans to shut its first unit in April 2022 and the remaining three units in 2023.

A NSW and federal government task force is looking at how the closure will affect the state's power supply as well as local businesses and households.

The Australian Energy Market Operator has warned there is a higher risk of blackouts in NSW once Liddell closes if there is no more investment.

Sky News reported a draft report by the task force has found it would cost $300 million to keep the power station running for another three years to 2026.

However, the report found even if the money was available there was no guarantee of continued reliability and any decision to keep the plant running for longer could deter investment in the energy sector.

The report said gas, pumped hydro and batteries could deliver reliable power once the plant was shut down, according to Sky.

Mr Taylor said, in answer to a question in parliament about the leaked report, he would not pre-empt the final report of the task force.

"But we've been clear all the way along - as generators come to the end of their natural lives we want to see life extension (of existing plants) or like-for-like replacement," Mr Taylor said.

"This is all about adding in more supply to the electricity market whilst we ensure that the existing supply is managed very carefully."

He said careful management of power generation was delivering cheaper electricity while maintaining reliability.

A NSW government spokesman said the final report's findings would be considered once it was received.

Australian Associated Press