The head of energy company AGL, Andy Vesey, is being bullied by the Prime Minister, according to Federal Labor MP Joel Fitzgibbon.

Malcolm Turnbull summoned Mr Vesey to Canberra for a meeting on Monday over AGL's plan to close the Liddell power plant in 2022.

The PM wants AGL to keep the plant open for at least another five years or sell it to another company, like Delta Energy Systems which is open to buying it.

The Government emphasised Mr Vesey agreed on Monday to ask the AGL board to consider keeping the power station open longer.

But Mr Vesey told the ABC the company could find the best solution for the market without extending the life of the power plant or selling it.

Mr Fitzgibbon challenged Energy Minister Josh Frydenberg in the parliamentary corridors this morning and accused him of misrepresenting Mr Vesey's position.

"I think you're embarrassed for every day you've got to roll out and support the Prime Minister's desperate attempts to mislead the Australian community," Mr Fitzgibbon said in a heated exchange as the two men were in the parliamentary press gallery for interviews.

Mr Frydenberg hit back, accusing the Labor MP of defending big energy companies.

"You know that 10 per cent of New South Wales' power comes from Liddell. You know that there's energy companies making record profits on the back of Australian families," the Energy Minister said.

Mr Turnbull kept the pressure on AGL this morning, saying they were making a fortune from coal-fired power.

AGL 'speaking with a forked tongue'

Liberal backbencher Craig Kelly accused AGL of being duplicitous.

"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.

AGL's Andy Vesey and MP Craig Kelly are at odds over the future of the Liddell power plant. ( ABC News )

"I am a little bit angry, but it [does not] surprise me whatsoever — we've seen AGL, probably one of our biggest corporate villains, they've cut off tens of thousands of Australians, they've disconnected them from their electricity because of the high cost of electricity, they've been rallying against coal at a time when 80 per cent of their generation comes from coal.

"They seem to be saying one thing and doing another thing — they're claiming they're this clean green company when predominately they're a coal generator."

There has been an open tug-of-war between the Government and AGL over the future of the Liddell power plant.

Coalition MP Matt Canavan has questioned why the company wants to close the plant — rather than sell it.

"I have serious concerns that their current proposal to shut Liddell power station is about boosting their profits than protecting the energy system — it's certainly not about saving the planet, that's certainly not what AGL are doing, and I think that's becoming transparently clear."

'Highly unusual' for Government to exert pressure on AGL

Shadow energy minister Mark Butler said AGL's motive was clear and simple.

"AGL is the only group that's crunched the numbers of the viability of extending the Liddell power station after 50 years of age, and after it crunched the numbers it came to the view it didn't stack up," he said.

AGL will now prepare a plan for the Government, outlining how it will avoid a market short-fall if it closes the plant.

It will deliver that plan in 90 days, but Frank Jotzo, the director of the Centre for Climate Economics and Policy at the Australian National University, said the outcome was obvious.

"AGL have very clearly stated that the intent is to close Liddell and more broadly that they do not see a future for coal-fired electricity generation in Australia beyond the lifetime of the existing power plant — and there really is no reason why they would change their mind about that," he said.

Professor Jotzo was asked why Mr Vesey agreed to take the Government's request to the AGL board.

"I don't know what goes on in these discussions but I guess when you're being called in by the Prime Minister to take a proposal to your board you might say yes — and I guess in that context — we can observe it is highly unusual for Government to exert pressure on an individual company and intervene in an ad hoc way in what is a market-based system.

"It's really quite bizarre what we've seen going on here."