AEMO report will 'please' pro-coal MPs

A new report suggests Australia's coal-fired power stations will be needed for years to come

A new report arguing coal-fired power plants will have to remain open for decades to keep energy prices down will please pro-coal coalition MPs, federal Energy Minister Josh Frydenberg says.

The Australian Energy Market Operator says consumers will be relying on coal-fired power for years to come as the market transitions to renewables, as this is the most viable way to keep bills down.

"To support an orderly transition ... based on projected cost, the least-cost transition plan is to retain existing resources for as long as they can be economically relied on," it said in a report released on Tuesday.

The Turnbull government welcomed the report, with Mr Frydenberg saying it sends "a warning shot that coal needs to remain an important part of the energy mix if we want to keep our prices down and our stability up".

But he ruled out direct federal government intervention to keep coal-fired plants open or build new coal power stations - an option being advocated by a small group of MPs including former prime minister Tony Abbott.

"I'm sure a lot of my colleagues will be pleased with what they've seen in this report, which says that coal will continue to be critical in the years ahead," he told ABC radio.

"If they're in the electorates in Queensland or in Victoria or in NSW where coal assets are currently in operation, they know that for those workers there will be a future."

Prime Minister Malcolm Turnbull has no issue with keeping coal-fired plants open for the "term of their natural life".

"There's no question that getting more megawatt hours out of an existing coal-fired power station is cheaper than the megawatt hours that would come out of a new one," he told 3AW radio.

Mr Frydenberg, who will meet with his state and territory counterparts on August 10 to discuss the government's planned National Energy Guarantee, also said Australia had "turned a corner" on power prices.

"With the National Energy Guarantee we believe we'll have more reliable energy system and we won't repeat the sins of the past where we did see the premature closure of power stations and a massive increase in the wholesale price," he said.

The government needs all of the state and territory governments on board if its National Energy Guarantee - which aims to lower power prices - can go ahead.

But John Grimes, chief executive of the Smart Energy Council, said the future of small-scale solar renewable energy was uncertain under current policy.

"The National Energy Guarantee is being turned into the national coal guarantee," he said.

Meanwhile, a Newspoll conducted for The Australian found voters believe the federal coalition is best placed to keep power prices lower and maintain reliable energy supply.

The Turnbull government is leading Labor 40 per cent to 34 per cent on the question of which party has the better approach to energy.