The Federal Government is ramping up pressure on AGL, as it continues to press the energy company to sell its Liddell power plant instead of closing it.

Key points: AGL plans to close Liddell power plant in 2022, but is hesitant to sell because it needs to reuse some of its components

AGL plans to close Liddell power plant in 2022, but is hesitant to sell because it needs to reuse some of its components Federal Government says closure would create a huge shortfall in reliable energy supply, so wants AGL to sell

Federal Government says closure would create a huge shortfall in reliable energy supply, so wants AGL to sell Energy Minister Josh Frydenberg, former deputy PM Barnaby Joyce both weighed in

Yesterday another power company, Alinta, said it was interested in making a bid for the ageing coal-fired plant in the New South Wales Hunter Valley.

AGL plans to close Liddell in 2022, but is lukewarm about selling it.

The company has argued that it needs power from the plant for the next four years, and plans to reuse some of its components after that.

This has infuriated the Federal Government, which maintains the closure would create a huge shortfall in reliable energy supply, increasing the risk of blackouts on Australia's east coast.

Josh Frydenberg says AGL should consider any offer for the Liddell power plant. ( ABC News: Andrew O'Connor )

Energy Minister Josh Frydenberg has hit out at AGL, saying the company had changed its tune since last year, when it declared that Liddell was so dilapidated it was on a "sliding scale to oblivion".

"You have to ask yourself, why is AGL changing its position about the quality of this asset?" Mr Frydenberg said.

"They went out of their way to tell Australia the asset was in disrepair and had no future — now they're saying it's a critical part of their infrastructure."

Mr Frydenberg said remediating the power plant would be very expensive, and Alinta would be willing to keep on supplying AGL with power from Liddell before 2022, to ensure it did not have to deal with any shortfalls.

"The board as well as management have a responsibility to put an offer to its shareholders and properly consider (the expression of interest)," he said.

"Let's just wait and see where these negotiations go."

Environmental groups have warned that keeping Liddell open would cost huge amounts of money, as well as substantially boost pollution — and AGL has so far resisted pressure from the Government to sell Liddell.

But the latest salvo from Mr Frydenberg is part of a concerted effort by the Government to force AGL to change its position by drawing it into the political fray.

Former deputy prime minister Barnaby Joyce went further than the Energy Minister — accusing AGL of trying to close the plant so it could jack up power prices across Australia.

"Why are they so insistent on not wanting to sell it? Why are they so insistent to spend $100 million to pull it down and not actually sell it to somebody else and put the costs off to somebody else?" he said on 7.30.

"I'll tell you why. Because [they] want to short the market. They put up the price of power and make more money from fewer assets. Guess who pays for that? You do."

Mr Joyce also weighed into the internal Coalition debate about building new coal-fired power stations.

A group of Coalition MPs calling itself the Monash Forum has been circulating a letter calling on the Government to consider building new stations, in order to shore up supply and reduce power prices.

The "Monash Forum" includes Tony Abbott (left) and Kevin Andrews (right), as well as Eric Abetz. ( ABC News: Matt Roberts )

Treasurer Scott Morrison has dismissed the call, saying energy from new plants would be much more expensive than the energy produced by existing plants.

But Mr Joyce mocked the Treasurer's logic.

"Well, if that was the case then we wouldn't build the Harbour Bridge, we wouldn't build any tunnels. Let's just stop still. Let's stop civilisation where it is," he told 7.30.

"This is about trying to make sure that the people that we represent … get affordable and reliable power. If that means we have to build coal-fired power stations, let's do it."