Generators would bid to build a new power plant - which would replace some of the 1600 megawatts lost when the giant Hazelwood plant closed - and it would be underwritten by a "purchase supply" agreement, which effectively would see the government or the market operator guarantee to buy a substantial portion of the power generated over a period of years. In the meeting, the Minerals Council showed modelling that suggested a new plant could provide power at $60-$70 per megawatt hour, which is cheaper than other modelling has suggested for a HELE coal plant. In the AGL meeting, about 10 Coalition MPs heard that, primarily, technological uncertainty was holding back investment in new electricity generation. That meant, the meeting was told, that energy giants such as AGL were investing in smaller projects rather than major new generation. But political uncertainty, which has deepened since the release of the Finkel review of the electricity sector a little over two weeks ago, was also blamed.

The AGL representatives broadly endorsed the Finkel review's recommendation for a clean energy target [CET], and said that it was theoretically possible a new coal fired power station could be built in Australia - though they played down the likelihood of that happening. Speaking after the Minerals Council meeting, NSW MP Craig Kelly said their proposal "has a lot of merit because we first and foremost, as Finkel highlights, need to fix the shortage of dispatchable power in the market place". "If that can be done with renewables, with storage, fantastic. Coal people say HELE is the best way, gas people say they could do...the aim would be to get it at the most cost-effective price at the moment," he said. Dr Finkel, the chief scientist, has said "it is conceivable" a new coal-fired power plant could be built under his CET, though he would be surprised if the government sought to facilitate this. Following the release of the Finkel review, Prime Minister Malcolm Turnbull faced a fierce backlash from the backbench over the plan, with MPs concerned it could drive coal out of the market.

However, the CET would actually see coal generators stay online for longer through until 2030, before their use began to decline. The government has not yet formally responded to the Finkel review, and Labor has warned that any response that is too coal-friendly may struggle to win their bipartisan support.