It will cost consumers up to $50 million to keep the lights on and fridges running this summer.
The energy market operator has warned of an "increasing and unacceptable risk" of power shortages.
To counter that and try to avoid blackouts, it wants to pay businesses with diesel generators — as well as gas power plants with spare capacity — to be on standby to pump extra power into the system when it's struggling.
That might also mean paying big energy users like factories to avoid using power at peak times.
That would cost up to $50 million, which Energy Minister Josh Frydenberg said would be passed on to consumers.
"Well, $50 million spread across the Australian consumer base is not a lot of money in the scheme of things," he said.
"And in return, you are going to get sufficient capacity to helpfully avoid any disruptions to energy supply. So this is the reality that we find ourselves in."
One of the Government's answers to keeping the power on and the fridge running is already looking shaky.
Prime Minister Malcolm Turnbull told Parliament there are talks with energy company AGL about keeping the nation's oldest power station, Liddell, open at least five years beyond its due closing date in 2022.
Liddell is the third-largest power station in Australia and keeping it running longer would be aimed at avoiding another power gap.
But after that comment, AGL reinforced that it was committed to the closure of the Liddell power station in 2022, which is the end of its operating life.
Labor attacked the plan.
"Malcolm Turnbull indicated that he was proposing to sell the Liddell power station, which is not his to sell at all, the problem with this is it appears the Prime Minister is making this up as he goes along," Labor's environment spokesman Mark Butler said.
Mr Turnbull later said AGL was prepared to sell the Liddell power station to a responsible party.
But AGL has today issued a statement to the stock exchange saying it has made no commitment to sell the power station or extend its life beyond 2022.
It said it will continue to work with governments and regulators to deliver appropriate outcomes.
Energy generator Delta Electricity said it may be interested in buying the Liddell power station.
In a statement, Delta Electricity said while no-one had approached it about buying the power station, it was interested in acquisitions that support a reliable electricity supply.
