Businessman Dick Smith has announced he will contest the next election after releasing a video defending coal and attacking Prime Minister Scott Morrison's lack of leadership on energy policy.

Mr Smith told Sky News he will stand in the Sydney blue-ribbon seat of Mackellar, previously held by Bronwyn Bishop.

His announcement coincided with the release of a skit featuring the entrepreneur saying "what our Prime Minister Scott Morrison really wanted to say about climate change, fossil fuels and renewable energy".

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Here's my latest video. It's only 2.44 min, and it shows what our Prime Minister Scott Morrison really wanted to say about climate change, fossil fuels, and renewable energy. https://t.co/yjtQhFwr4f — Dick Smith (@DickSmithFairGo) November 27, 2018

In the video, Mr Smith holds a lump of coal with an Australian flag in the background, a reference to when then-Treasurer Mr Morrison brought the fossil fuel into Parliament last year.

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"Hi it’s Scott Morrison your Prime Minister here, this is the lump of coal I showed in parliament a while ago," the skit starts.

Mr Smith then goes on to criticise the idea that renewable energy is an affordable alternative.

"It's not true. Nothing will ever be as cheap as coal."

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He suggests holding a plebiscite on energy where only people under the age of 30 can vote.

"I'm 50 years of age and it's clear people that people my age and over are less likely to be affected by any changes in the climate," he said.

"The plebiscite will ask the young people of Australia whether they accept the need to stop burning fossil fuels.

"On the yes side I'll ask Mike Cannon-Brooks and Bindi Irwin to prepare the case and it will be widely communicated.

"On the no need to change side we'll have Maurice Newman and Peta Credlin organise the information."

He concludes that coal is "beautiful".

"Once they get the results of the plebiscite and the real cost of the renewables, I'll show I have the leadership required to win the war."

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Mr Smith told Sky News it would be a "low key campaign" and he doesn't expect to win.

"The Dick Smith manifesto says 'we are going to put the taxes up on the wealthy so we're not borrowing from our kids in the future'. So they're the type of things that I think when people get into the ballot box, they won't vote for me."

The seat, located in Sydney's affluent northern beaches, is one of the safest Liberal Party seats in the country.