Australian energy review calls for fuel-neutral clean energy target

Mr Abbott said it should deliver cheaper power and not "clobber" the Australian economy.

Bill Shorten has extended an olive branch to the federal government to end the "climate wars" and work together on a response to a major review of energy security.

In particular, the amount of support offered to coal - once the Turnbull government formally responds to the Finkel review - could be a key sticking point.

"My anxiety, based on the reports we have seen, is that the scenario which the Finkel report is recommending gives us not 50 per cent, but 70 per cent renewable energy by 2030 and coal, which is by far the cheapest source of base-load power, and in most years is our biggest single export, coal goes from now 65 per cent to 25 per cent of total energy generation", he told Sydney radio station 2GB.

The current renewable energy target [RET] would operate until then. It will also look at affordability and sustainability, as more renewable energy flows into the electricity system, and coal-fired power stations close.

Chief Scientist Dr Alan Finkel will present his electricity market report to the COAG leaders meeting in Hobart on Friday.

Australia's largest manufacturer has backed a clean energy target and says it is absurd to favour providing affordable and reliable energy over reducing carbon emissions.

If Finkel's clean energy targets are met, prices would be expected to decline. This is because under an EIS there would potentially be a faster phase out of coal-fired power, which would threaten energy security as gas would be too expensive to replace coal and renewable storage is still in its infancy.

Typical was Bob Ward, a policy director at the Grantham Research Institute on Climate Change and the Environment, at the London School of Economics and Political Science. The Turnbull government stamped on that latter concept within days of its release in December.

The Liberals needed to be the party of cheap power, and let the Labor party be the ones who send prices up.

"We are prepared to push the national interest - and even compromise on some of the gold-standard changes we think need to be made, just so we can stop arguing about climate change, and ensure investor certainty", Mr Shorten said.

Gas would play an essential role in providing secure and reliable electricity, but this would need better oversight by the Australian Energy Market Operator as well more development of gas with proper compensation for landholders and community consultation.

Our organisations believe that the worst outcome for energy consumers and suppliers alike would be the absence of any credible and enduring energy and climate policy in Australia.

The Turnbull government hopes it will be a policy to reduce greenhouse gas emissions that can attract bipartisan support and give business the chance to make long-term investment decisions.

What you're paying for power - and why - is the responsibility of the ACCC to investigate.

So although Dr Finkel's report will talk about power costs, it will be largely in the context of what a CET would mean for electricity generators and suppliers.

  • Zachary Reyes