The government is proposing emissions in the National Electricity Market - a grid that serves about 80 per cent of Australia's consumers, mostly in the eastern states - should drop between 26 to 28 per cent from 2005 levels by 2030, a rate roughly in line with the country's pledge to the Paris climate accord. "We fully expect the size of the emissions targets is something that will be debated for years and years to come," Mr Collette said. “The thing is not to have a debate on targets straight away but let’s get momentum towards affordable energy. "We think that the ministers will add more flesh to the bones of it on Friday. The more we can build then the better chance for success, so let’s not sweat the small stuff.” Loading Ed McManus, chief executive of Meridian Energy Australia, said investors were pouring money into renewable investments across the country, leading to lower wholesale prices. That confidence, though, was "quite a delicate thing”.

"If something happens that spooks investors and spooks energy traders, things could go the other way," Mr McManus said. Should investors start to hold back, "we’ll see higher prices for longer and not enough renewables coming in to meet our Paris commitments," he said. "That's the danger of not arriving at a stable policy environment, one way or the other.” Wind farm generation costs are continuing to slide. Credit:Jessica Shapiro

States and territory ministers continue to work their way through the details of the two design papers released before the COAG meeting, one provided by the Energy Security Board and the other by the federal government. So far, Labor-led jurisdictions - Victoria, Queensland and the ACT - have voiced concerns about the policy's design, including the low emissions target. Western Australia has also raised issues over the policy, despite its inability to weigh in. One issue is how to incorporate higher targets - such as renewable energy goals - into a national program without allowing other states to free-ride. Frank Calabria, chief executive of Origin, said the reliability requirement within the NEG - ensuring that the grid could cope with the ramping up of renewable energy - still needed to be settled and setting emissions targets could distract the debate. "We’re not calling for a specific target or anointing a number [for the government to implement] but we’re not shying away from doing more," he said.

He expects big questions will remain after the Friday meeting, with much to be done before COAG ministers are scheduled to reconvene in Sydney in August. "We’ve never had such a great opportunity to settle an energy policy framework," Mr Calabria said. "There’s no doubt details will unfold over time." Kane Thornton, chief executive of the Clean Energy Council, said his industry group views the policy has "currently headed in the right direction". "While the ambition of the policy to reduce emissions is much too low and this is a substantial point of contention, many of our other major concerns about issues such as competition and complexity for contracting have either been addressed already or are in the process of being addressed," he said. Meridian's Mr McManus agreed that the use of markets to resolve the reliability issue - rather than requiring investment in a physical plant - eased one of his firm's major concerns.