While senior ministers hinted that compulsory acquisition could be an option of last resort, with Trade Minister Steven Ciobo calling it "too early to start intervening", Mr Turnbull left no doubt as to the government's approach. "We are talking to the company ... there are buyers that are interested, they [AGL] said they'll consider their submissions but ... this talk about strong-arming and nationalising assets, I mean, that's not the way we operate ... you know, nationalising assets is what the Liberal Party was founded to stop governments doing," he said. Loading Energy and Environment Minister Josh Frydenberg subsequently also dismissed the acquisition idea, calling it the "dead hand of socialism". The government has recently pressed AGL management to sell the generator to a competitor rather than simply take it off-line in 2022 as is currently planned.

As Mr Turnbull attempted to overcome his Newspoll embarrassment, his predecessor used a Latrobe Valley stop on his annual Pollie Pedal to push the Coalition to beef up its commitment to coal-fired electricity. Mr Abbott, who recently called for new coal-fired power stations to be directly funded by the government, accused AGL's American CEO, Andy Vesey, of simply chasing bonuses. “AGL is an Australian company with an American head but there is no way on God’s earth we should allow the AGL boss, who wants to maximise his bonuses, who wants to maximise the prices he gets, there is no way we should allow this to jeopardise our national interest," Mr Abbott said. Prime Minister Malcolm Turnbull with Minister for Women Kelly O'Dwyer in Sydney on Monday. Credit:AAP On Sunday, Mr Frydenberg confirmed the government had been advised by the Australian Energy Market Operator that there would be "a greater likelihood of blackouts if Liddell was to close in 2022".

He also cited advice from the competition watchdog, the ACCC, arguing that were Liddell to be sold to competitors Alinta Energy or Delta Electricity, rather than decommissioned, "competition would go up and prices would go down". Both companies have expressed interest in extending the life of Liddell to 2029, subject to due diligence and to price. The government believes the baseload shortfall from Liddell's closure will be fixed by the completion of its Snowy 2.0 project once it comes online in the mid-2020s. But Mr Abbott said governments should be more active in the electricity market. "Let’s face it, it is an essential service, electricity is not an optional extra in the modern world, it is an absolute essential service, and if a company is threatening an essential service, it is up to the government to take appropriate action and keep that essential service going," he said.

One energy analyst who did not wish to be named said governments were generally well advised to avoid becoming direct players in markets. Loading Replay Replay video Play video Play video "The government generally doesn't want to be an asset owner, but they can go into there to drive government objectives and policies," the industry expert said, pointing to the recent acquisition of Snowy Hydro. "On the flip side, by entering into the market they are creating uncertainty and stifling the market by creating a false environment. "It's a double-edged sword."

Energy groups also warned against Mr Abbott's plan, saying it would greatly impact Australia's sovereign risk profile. “Compulsory acquisition of any major private generation asset would be the first step towards re-nationalisation and pose material sovereign risk issues for private investment in Australia," Australian Energy Council chief executive, Matthew Warren, said. “It would further undermine investor confidence in the sector and expose future governments to fund billions of dollars for investment that will be needed. “Business needs governments to set effective, durable policy so that investors have confidence to proceed.” Treasurer Scott Morrison said he had no intention of compulsorily acquiring AGL's property and did not have the power to do so in any event.