Ms Zibelman said the Liddell power station would not be required beyond its slated retirement date if its capacity was “met by other resources”.
A “reliability mechanism” such as an auction could be developed to encourage a range of new energy sources to bridge the power gap, she said.
“This is the longest notice we’ve ever had of a generator retiring and it gives us an opportunity to develop the right kind of auction approach … to procure the kinds of resources we need,” Ms Zibelman said.
“I suggest it would be a portfolio of resources.”
Ms Zibelman agreed with a suggestion that a solution might involve investing in energy storage, updating existing plants and further investigating gas generation.
“We could certainly look at … investment in an existing plant … you could look at a combination of storage and renewables,” she said, adding that demand management markets also “need to mature”.
AEMO is reviewing the state of Australia’s coal-fired fleet. Labor maintains that according to industry, Liddell’s advanced age means it is the least suitable candidate of the nation’s coal-fired power plants for refurbishment.
On Thursday, former prime minister Tony Abbott told 2GB that Australia’s power system was becoming “unstable”, which was “a real issue”.
“That’s why we need to get right away from talking about renewable energy targets and clean energy targets and start talking about a 100 per cent reliable energy target, because nothing else will do,” he said.
Mr Abbott said it was a “good question” whether Australia should withdraw from the emissions reductions commitments it signed up to at the Paris climate accord in 2015.
In question time, Environment and Energy Minister Josh Frydenberg disputed claims by Labor that average Sydney power bills had risen $1000 since the government came to office, and accused the Opposition of deceiving voters.
Opposition Leader Bill Shorten questioned why the government would not commit to a Clean Energy Target – a recommendation by Chief Scientist Alan Finkel – when Prime Minister Malcolm Turnbull had claimed three months ago the idea “has a lot of merit”.
“His own Chief Scientist said the Clean Energy Target was urgent and would put downward pressure on power prices,” Mr Shorten said.
Mr Turnbull said the government was working on a long-term energy policy.
Right-wing Coalition MPs have revolted against the prospect of introducing a Clean Energy Target in line with the Finkel recommendations.