The Federal Government needs to "get out of the way" of efforts to provide reliable and stable electricity, the former head of the Clean Energy Finance Corporation (CEFC) has warned.

Key points: Government could change name of target and rework it to allows for investment in "clean coal" projects

Government could change name of target and rework it to allows for investment in "clean coal" projects Yates likens that to "dirty energy target"

Yates likens that to "dirty energy target" AEMO last week published report warning of deep-seated problems with national electricity grid

Australia's Chief Scientist, Alan Finkel, has proposed a Clean Energy Target in a bid to reduce carbon emissions while making power more affordable and reliable.

The ABC understands the Government could change the name of the target and rework it so it also allows for investment in so-called "clean coal" projects.

But former CEFC chief executive Oliver Yates likened that to a "dirty energy target" and "almost the inverse" of the original plan.

Mr Yates was the founding chief executive of the corporation the Gillard government set up to boost investment in renewable energy in 2012 and left the organisation earlier this year.

He said the drawn-out political debate over energy policy had become far too polarised and the Australian Energy Market Operator (AEMO) should instead be given space to work on keeping the lights on.

"If the Government just allowed AEMO to get on with the job of ensuring that we have reliable and stable supply, then it would probably become depoliticised," Mr Yates said.

AEMO last week published a report warning of deep-seated problems with the national electricity grid, cautioning it was struggling to provide reliable supply.

The organisation has set out a blueprint for future planning, including the setting up of "strategic reserves" to prevent shortfalls this summer, and in 2022, when electricity company AGL is expected to close its ageing Liddell plant in NSW.

Following the release of the report, Prime Minister Malcolm Turnbull called for the station to continue running for an extra five years to try to avoid power shortages.

But Mr Yates said the AEMO report had been taken out of context.

"AEMO never said that you're going to end up with critical crises or you're going to run out of power in 2022," he said.

"What they said is the same thing as I say to my kid when they want to borrow the car: 'If you want to borrow the car and you don't fill it up with petrol, you'll run out of petrol'.

"What AEMO said is that if you want to close down coal-fired power stations in 2022 or 2025, you need the policy and arrangements in place that enable you to release that capacity."

AGL head criticised over Liddell plans

Coalition MPs have lashed out at AGL boss Andy Vesey over the plans for Liddell this week, with backbencher Craig Kelly accusing Mr Vesey of speaking "with forked tongue".

But Mr Yates said the energy company was the one providing some market certainty.

"AGL was kind enough to announce, almost two or three years ago, that they intend to shut down Liddell in 2022," he said.

"Even under the Finkel review, they're only requiring that coal-fired power stations give three years' notice. AGL gave about seven."

Mr Yates said investors had made plans based on that information, which the Government could now jeopardise.

"At the moment, most of the industry is trying to replace capacity based upon a projected closure date of coal-fired power stations," he said.

"That's very difficult if a prime minister walks into the room and basically says, 'Well, I know you've been investing on that basis, assuming all this is going to happen, and you've been spending money developing projects, but I think I might just decide to legislate in some way and keep these clunkers open'.

"That doesn't help the market at all."

'An enormous amount could be done'

Mr Yates also said part of the blame for the nation's energy challenge lay with the National Electricity Market.

"If you want to go back a few years, you'd say the failure happens to be the National Electricity Market, which hasn't built one interconnector of any substance between states to allow you to actually move the most transportable substance on the planet," he said.

"South Australia has got in a position because the national regulator would not allow the construction of an additional transmission line so it could take power from Victoria or transmit power to Victoria.

"We've got an issue that we still don't have an additional cable from Tasmania.

"Tasmania could provide baseload capacity, it could be the battery to the National Electricity Market, but it is struggling to get a second Basslink to it.