Malcolm Turnbull is hoping to head off a "grave shortage" of electricity by finding an investor to keep a 46-year-old NSW coal-fired power station open.
The prime minister will hold talks next week with AGL - which owns the Liddell power station in the Hunter Valley scheduled for closure in 2022 - as the government seeks to prevent summer blackouts across eastern states.
Mr Turnbull has also sought advice from the Australian Energy Market Operator on whether anything can be done to prolong the life of other coal-fired power stations.
"We face a grave shortage of energy over the medium term and that is putting jobs at risk, it is putting households under pressure," Mr Turnbull told parliament on Wednesday.
Delta Electricity, which bought NSW power station Vales Point for just $1 million in 2015, has flagged interest in the plant.
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The company, in a statement, said it had not been approached about buying Liddell and the purchase and any life-extension "would need to be carefully considered on proper commercial terms".
"A thorough due diligence process would need to be undertaken to understand the condition of the plant and the costs before any decision is made by Delta, but we would be prepared to undertake the exercise," spokesman Steve Gurney said.
Labor frontbencher Joel Fitzgibbon - whose seat includes Liddell - says he's had discussions with AGL in the past and had been told extending the plant's life could not be justified.
"I'm told it just doesn't stack up ... it would cost between $500 million and $1 billion to do and of course the returns are highly questionable," he said.
"And I'm advised the reliability of the extended station would be less than the reliability of Liddell as it is now."
AGL told the stock market on Wednesday it would close the plant in 2022, reaffirming a decision announced in April 2015.
"AGL will continue to engage with governments, regulators and other stakeholders to deliver appropriate outcomes but notes that the company has made no commitment to sell the Liddell power station nor to extend its life beyond 2022," the company said.
Mr Turnbull told reporters AGL had informed him it was prepared to "discuss the sale of the power station to a responsible party".
The closure of the plant would create a 1000MW gap in baseload, dispatchable power generation.
"What we are now doing is ensuring that we put in place all of the options that we can examine to make sure that that 1000 megawatt gap in dispatchable power is not realised," Mr Turnbull said.
Mr Turnbull said keeping Liddell open was one option, but "no doubt there are others".
Greens leader Richard Di Natale said the government had overseen a "colossal failure" of planning.
