Located to the south of Muswellbrook township are two coal fueled power stations, Liddell and Bayswater, commissioned in 1972 and 1985 respectively, which together produce enough electricity to power 3 million homes (Macquarie Generation).
Bayswater Power Station has four steam driven turbo generators, which were completed progressively over 1985 and 1986, and have a combined capacity of 2,640MW of electricity. Much of the coal is supplied by overland conveyors from mines it shares with the nearby Liddell Power Station (Macquarie Generation).
Bayswater draws its cooling water from the Hunter River under water entitlements negotiated with the Government of New South Wales. The Barnard River Scheme also allows Bayswater and Liddell to transfer water from the upper Manning River catchment into the Hunter River for their use (Macquarie Generation).
Liddell was the first major power station in NSW to be built inland, using fresh water for cooling instead of the more abundant salt water used in coastal power stations. To accommodate this, Lake Liddell was expanded to provide more water. In addition, water is drawn from the Hunter River when necessary to supplement the lake.