The Turnbull government has avoided an all-out brawl with the states and territories over its signature power policy, securing agreement from most energy ministers to progress the proposed national energy guarantee.

But Victoria has warned that states remain "extremely nervous" about the government's plan, and South Australia accused its coal-dependent counterparts of banding together and supporting a "third-best option" for the future of Australia's electricity sector.

The national energy guarantee forces energy companies to meet mandated standards of reliability and emissions reduction. The Turnbull government says it will deliver lower power prices and a more reliable electricity supply, but critics say it thwarts growth in renewable energy, props up ageing coal-fired power plants and will fail to sufficiently drive down dangerous carbon emissions.

Environment and Energy Minister Josh Frydenberg on Friday headed off a defeat at the meeting of COAG energy ministers in Hobart by seeking their support only for conducting more extensive work on the design of the guarantee, rather than seeking backing for the plan itself.