A $200 MILLION plan to upgrade Eraring Power Station would increase greenhouse gas emissions in Lake Macquarie by 1.4 million tonnes a year, the city council says.

If the power station's planned extra capacity was fully utilised, net emissions of carbon dioxide would increase from 13.1 million tonnes a year to 14.5 million tonnes, the council said in a submission to the Department of Planning.

This was despite the fact that efficiency improvements at the power station would "slightly lower greenhouse emissions per unit of generating output", the submission said.

The council used data from Eraring's environmental assessment to make the claim.

It said Eraring's assessment did not analyse the net increase in emissions.

Eraring's assessment said the upgrade would reduce greenhouse gas emissions by 200,000 tonnes a year, based on present production levels, irrespective of demand.

The council's submission said the power station represented "a significant proportion of emissions from the city".

The council was committed to reducing greenhouse gas emissions and stabilising them at 1995 per capita levels by 2010.

"Council is becoming increasingly aware that the City of Lake Macquarie may be significantly impacted by climate change," the submission said.

The council was concerned that the planned upgrade would increase the community's reliance on coal-fired power, at the expense of investment in renewable energy technologies.

An analysis should be done to ensure the upgrade did not preclude the future use of carbon capture technology, it said.

The council urged Eraring to use carbon offsets for emissions above 13.1 million tonnes a year.

An Eraring spokeswoman said it had adopted an offset strategy, which included planting mallee trees in western NSW.

The department is assessing Eraring's upgrade proposal.