Deputy Prime Minister Barnaby Joyce says he knows of two possible buyers for a Hunter Valley coal-fired power station.
Energy giant AGL is considering whether to keep its Liddell power station open for another five years beyond its shutdown date of 2022 or sell it to another company.
The Turnbull government wants the power station to continue operating to ensure a forecast 1000MW gap in generation does not occur.
Mr Joyce told Sky News on Tuesday there are two potential buyers for the coal-fire station.
'I've had people in my office who have said: 'I want to buy it',' Mr Joyce said.
'If it's such a hassle, if it's such a terrible asset, well there are people out there who want to buy it, just put it out there on the market.
Mr Joyce questioned the reasons behind why AGL had not yet put the power station on the market adding 'one might suspect they are shorting the market'.
'Why pull a power plant to pieces if they are people out there who want to buy it?'
Energy Minister Josh Frydenberg says the ball is now in AGL's court but the government wants an answer on the future of the Liddell power station within three months.
Mr Frydenberg told Sky News that AGL CEO Andy Vesey reaffirmed his commitment in a meeting with the prime minister yesterday.
'He would rather come up with another plan which he's going to do over the next 90 days, the only option we have on the table right now is to keep Liddell open,' he said.
Mr Vesey will take a proposal to the keep the Liddell power station in the open for five years beyond its 2022 close date to the company board.
Under the proposal the coal-fired plant would either continue to be run by AGL or be sold to another company.
But despite his undertaking to the government, Mr Vesey believes the company's short-term future is in renewable energy supported by gas 'peaking' power.
'Longer term, we see this trend continuing with large-scale battery deployment enhancing the value of renewable technology,' he said.
'We just don't see new development of coal as economically rational, even before factoring in a carbon cost.'
The government expects to hear back from AGL within 90 days of Monday's meeting with Prime Minister Malcolm Turnbull and Mr Frydenberg.
The meeting came after the Australian Energy Market Operator identified a potential shortfall of 1000 megawatts of power in the eastern grid after 2022.
Labor frontbencher Joel Fitzgibbon told Sky News the prime minister had 'run up the white flag' on energy prices.
'I don't accept that, I want to fill that capacity hole, so does Andy Vesey.
'We should have started yesterday, Malcolm Turnbull threatens to take the wheels off the vehicle, to derail the project,' Mr Fitzgibbon said.
Earlier he clashed with Mr Frydenberg, accusing the government of misrepresenting the outcome of talks with energy giant AGL.
'Josh, I think you're embarrassed,' Mr Fitzgibbon told the minister in the corridors of Parliament House on Tuesday morning.
'I think you're embarrassed because every day you've got to roll out and support the prime minister's desperate attempts to mislead the Australian community.'
Mr Frydenberg hit back, telling Mr Fitzgibbon - who he later labelled 'no-coal Joel' - Labor was prepared to turn its back on a million households.
'You're defending the big energy companies who are making big profits,' the minister said.
Mr Fitzgibbon responded by saying: 'Off the back of the high prices you created.'
With AAP
