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Buyers lining up for coal, says Barnaby

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September 12, 2017

AGL chief executive Andy Vesey says the company's future is not in coal-fired power.

Energy giant AGL sees no future in coal-fired power despite agreeing to consider extending the life of an ageing NSW power station.

AGL chief executive Andy Vesey will take a proposal to the keep the Liddell power station in the NSW Hunter Valley open for five years beyond its 2022 close date to the board.

Under the proposal the coal-fired plant would either continue to be run by AGL or sold to another company.

But despite his undertaking to the government, Mr Vesey believes the company's short-term future is in renewable energy supported by gas "peaking" power.

"Longer term, we see this trend continuing with large-scale battery deployment enhancing the value of renewable technology," he said.

"We just don't see new development of coal as economically rational, even before factoring in a carbon cost."

The government expects to hear back from AGL within 90 days of Monday's meeting with Prime Minister Malcolm Turnbull and Energy Minister Josh Frydenberg.

The meeting came after the Australian Energy Market Operator identified a potential shortfall of 1000 megawatts of power in the eastern grid after 2022.

Mr Frydenberg said AGL would also produce a plan to ensure enough additional supply into the market to cover the deficiency in the grid left by Liddell's planned closure.

"From the government perspective, obviously our preference is to keep the power station open. But we haven't seen their plan," he said.

Greens climate change and energy spokesman Adam Bandt described the meeting as a "fizzer".

"All the government has done has forced AGL to bring forward its planning for new renewables," Mr Bandt said.

He expects AGL to return to the government with a plan for more renewable energy and storage.

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