Electricity company AGL is considering replacing its ageing Liddell coal-fired power station in the NSW Hunter region with pumped hydro and gas generation.

Key points: AGL says the coal plant is no longer reliable or financially viable, so it's looking for options to replace it

AGL says the coal plant is no longer reliable or financially viable, so it's looking for options to replace it Options include pumped hydro, or the more conventional gas turbines

Options include pumped hydro, or the more conventional gas turbines The company will reveal its proposal within 90 days

The ABC can reveal the options are likely to be part of the company's plan to replace the lost electricity generation when Liddell reaches its scheduled closure in 2022.

AGL is resisting demands from the Turnbull Government to keep the 45-year-old coal-fired plant open beyond 2022, saying it is no longer reliable or financially viable.

Under pressure from Prime Minister Malcolm Turnbull, AGL chief executive Andy Vesey last week agreed to put to his board a proposal to keep the coal-fired power station open for another five years or sell it to another operator prepared to keep it running.

AGL will reveal its proposal within 90 days.

A 2013 report commissioned by the NSW Government, obtained by the ABC, shows it would cost at least $980 million to keep Liddell open for an extra 10 years.

This is on top of the expense required for maintenance until 2022.

More than $140 million would have to be spent on the plants' boilers alone, the report by WorleyParsons Consulting concluded, but this would not guarantee the plant's reliability.

"By extending the operation of the power station a further 10 years, increased tube failures and more frequent breakdown of plant and equipment can be anticipated," the report said.

"Higher unplanned availability losses should be projected for the final 10 years even with the additional expenditure provided."

The ABC understands AGL is considering replacing the coal-fired generators with pumped hydro or gas to make good on Mr Vesey's pledge to "avoid a market shortfall once the Liddell coal-fired power station retires in 2022".

One option is to split the artificial Lake Liddell into two different levels or use nearby disused mines to allow for pumped hydro power generation.

A more conventional option will be to build open cycle gas turbines or so-called reciprocating gas engines to generate power at times of high need.

The Liddell power plant generates a maximum 2000MW, but it failed during February's heatwave and contributed to the blackouts.

The station, built in the early 1970s, comprises four 500MW units, which burn pulverised black coal.

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