The Prime Minister has declared he wants to make Australia the "affordable energy capital" of the world and says the system of promoting renewable energy is pushing up power prices.

Tony Abbott made the statement after one of Australia's largest power generators blamed increasing gas prices for its decision to close a major gas-fired station near Brisbane.

Stanwell Corporation will instead fire up a coal facility and sell the gas it would have used to generate electricity.

It has also reportedly called for the country's renewable energy target to be cut back, claiming it is distorting the energy market.

Mr Abbott says the Government review into the renewable energy target should come up with ideas to help bring power prices down.

"We support renewable energy, but I accept that the way the system works at the moment is putting upward pressure on power prices," he said.

"We've got a review of the renewable energy target coming up this year and I'll be asking that review to consider the impact of the renewable energy target on power prices and doing what it can to bear down on power prices."

He said Australia had "abundant" sources of energy and prices should not be as expensive as they are.

"We've got abundant coal, we've got abundant gas. In the appropriate parts of our country we've got plenty of wind and we've got a tonne of sun.

"So we can be the affordable energy capital of the world."

Mr Abbott also said scrapping the carbon tax would assist in making energy cheaper.