Prime Minister Malcolm Turnbull has put pressure on AGL to sell its coal-fired Liddell Power Station after Chinese-owned Alinta Energy expressed interest in acquiring the asset.

The power station is set to be retired in 2022, but the Federal Government wants AGL to extend the life of the power plant by five to seven years avoid a predicted power shortfall.

In a statement on Tuesday, AGL said consideration would be given should Alinta make a formal offer.

“AGL is relying on Liddell to generate power for our customers until 2022 and we will require its infrastructure for our replacement plans into the future,” the statement said.

AGL has so far rejected pressure from the Federal Government to sell Liddell and plans to replace it with renewables, batteries, gas power, upgraded coal power and demand response as part of its transition plan.

The PM told reporters on Wednesday he sees no reason why the power station can’t be kept going.

“AGL should do the right thing by their customers, but the community, and I think by their own shareholders and either keep this plant going for another four to five years or sell it to somebody who is prepared to do so,” he said.

AGL has previously warned that keeping the power plant open beyond 2022 could cost more than $900 million.

Last month, the Australia Energy Market Operator (AEMO) said closing Liddell in 2022 would leave a generation capacity shortfall of 850MW.

However, AEMO said if all three stages of AGL’s proposed post-Liddell plan were delivered “the resource gap will be eliminated”.

If the sale goes ahead, Alinta hopes to take control of the plant by September.

The company said it would provide AGL with the contracts out of Liddell up to 2022.



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