Students from the University of Wollongong have campaigned over the past three years for the university to switch to 100% renewable energy by 2015.
They have collected more than 3000 signatures from students in support of the plan.
The university administration has instead begun plans to build a trigeneration plant on the campus, which would generate electricity through burning natural gas.
A campus rally held on September 14, organised by the UOW Environment Collective, voiced opposition to this plan, saying gas is not a renewable energy source and will still generate greenhouse gas emissions.
There are also fears that a trigeneration plant would be powered by coal seam gas, which is produced through socially and environmentally destructive methods.
A strong campaign is being fought across the Illawarra to stop the coal seam gas industry from drilling locally.