Energy Minister Josh Frydenberg vs Labor MP Joel Fitzgibbon over Liddell

Environment and Energy Minister Josh Frydenberg has an argument with Labor MP Joel Fitzgibbon on energy issues as they cross paths at Parliament House. Photo: Alex Ellinghausen

Environment and Energy Minister Josh Frydenberg has an argument with Labor MP Joel Fitzgibbon on energy issues as they cross paths at Parliament House. Photo: Alex Ellinghausen

The tense stand-off between the Turnbull government and energy giant AGL has deepened after different accounts emerged of what happened in a meeting about the future of the Liddell coal-fired power plant.

Tensions boiled over on Tuesday when Energy Minister Josh Frydenberg and Labor MP Joel Fitzgibbon came face-to-face in the corridors of parliament house.

The Hunter MP reportedly took the minster to task over statements that Liddell power station could extend its life by an additional five years. 

Prime Minister Malcolm Turnbull and Mr Frydenberg said the government had secured a commitment from AGL to develop within 90 days a proposal to keep the NSW plant open, sell it, or guarantee equivalent power should the scheduled 2022 closure proceed. The government wants to plant to remain operating to meet a looming shortfall in baseload power.

However, a statement released by AGL following Monday's meeting noted it had committed to deliver a plan to avoid an energy shortfall "once the Liddell coal-fired power station retires in 2022".

Andy Vesey CEO of AGL arrives at Parliament House for a meeting with the Prime Minister Malcolm Turnbull in Canberra on Monday 11 September 2017. Fedpol. Photo: Andrew Meares

Andy Vesey CEO of AGL arrives at Parliament House for a meeting with the Prime Minister Malcolm Turnbull in Canberra on Monday 11 September 2017. Fedpol. Photo: Andrew Meares

While Mr Vesey said he agreed to the government's request to examine keeping the plant running or selling it, the statement emphasised the ageing facility's growing reliability problems.

Critically, AGL noted any new energy capacity would likely come from the development of gas power, pumped hydro, batteries and better managing electricity demand.

Mr Vesey later told the ABC the company could find a solution for the government while forging ahead with the power station's closure.

"I think that we are committed to finding the best solution for the market. We believe we can deliver that without having to consider the extension or sell the plant and that's what we're going to work on," Mr Vesey said.

Mr Frydenberg had emphasised that "AGL will take to its board a proposal to keep Liddell open for another five years, or to sell to another party".

As an alternative, Mr Frydenberg said, the company would also come up with a plan to ensure the equivalent supply of reliable, cheap energy.

On Tuesday morning, the government stood by its interpretation.

When the ABC read out loud Mr Vesey's quote on his preference to close the power station, Mr Frydenberg said: "Well, he's also said in his press release that he will follow up the discussion with the Prime Minister in taking a request to keep its Liddell power station running for another five years or to sell it to another party."

Mr Frydenberg said he would be "astounded, indeed astonished, if [Mr Vesey] was not to do that as promised".

Outspoken Liberal MP Craig Kelly, the chair of the backbench energy and environment committee, accused AGL of speaking with a "forked tongue" after Mr Vesey suggested the company did not want to see Liddell maintained beyond 2022.

"This seems to be completely contrary to the information that was coming out of the meeting with the Prime Minister and I think it appears AGL speaks with forked tongue," he said.

Mr Kelly labelled the company "probably one our biggest corporate villains" and accused them of hypocrisy for "rallying against coal at a time when 80 per cent of their generation comes from coal".

The story Stand-off between government and AGL deepens over Liddell first appeared on Newcastle Herald.

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