AGL Energy has rejected Turnbull government pressure to extend the life of the coal-fired Liddell power station and instead revealed a $1.36 billion plan to replace it with electricity generated from gas, wind, solar and other supply.

In a blunt rebuff of Canberra's request for the 45-year-old Hunter Valley plant to be either sold or have its life extended, the country's largest electricity producer stuck with its 2022 closure date and revealed that electricity from the portfolio of proposed new plants would cost 20 per cent less to produce.