Energy company AGL has said it is "fighting a losing battle" with turbine, boiler and conveyor belt problems at its ageing Liddell power station, insisting the plant must close in 2022.
The Federal Government regards the station in New South Wales as the key to energy supply for five years beyond that.
Prime Minister Malcolm Turnbull secured an agreement from AGL head Andy Vesey to ask the company's board to consider keeping the power station open longer.
But during a media tour of Liddell, AGL Macquarie general manager Kate Coates said she did not think the plant should stay open past 2022.
"I think we can spend our resources and our people's time better elsewhere," Ms Coates said.
She outlined numerous problems at Liddell, which is the oldest coal-fired power station still running in Australia, declaring it was on a "sliding scale to oblivion".
"The key thing for us is the fatigue in the boiler tube, so that is our most frequent failure," she said.
"We have corrosion damage where we have the internals of the tubes corroding, we have external erosion … so we've got multiple fronts of challenge on this plant on a daily basis.
"The failures become more regular, the weak points larger and more numerous. So, yes, we are fighting a losing battle."
AGL spent $123 million to boost reliability after buying the station from the NSW Government in 2015, but last year a leak on an external boiler tube cost up to $20 million to repair.
The Government is pushing for Liddell to remain open as it wants to avoid the power shortages the Energy Market Operator warns will occur when the plant shuts.
Mr Turnbull said extending Liddell would fill a gap until other projects, like a pumped-hydro scheme in the Snowy Mountains and large-scale battery storage for renewables, were ready.
Ms Coates said AGL had not changed its direction or plans to close Liddell in 2022, but said political debate about the plant had created confusion and stress for staff.
"I think this uncertainty has really caused a great deal of anxiety in our workforce," she said.
"Of course many of them have committed their entire careers to this power station and to see it close is a stressful thing in itself but at least we had certainty. They no longer feel that certainty."
