Oliver Yates, the former head of the Clean Energy Finance Corporation, says state and territory governments should not sign on to the Turnbull government’s national energy guarantee until such time as it contains meaningful emissions reductions.

Yates, a respected industry player now active in the renewables sector, and a board member of the Smart Energy Council – a solar group critical of the Neg – told Guardian Australia the Turnbull government’s policy “doesn’t do anything other than create a stable emissions profile for existing coal-fired power stations.”

“It’s absolutely of no benefit to the national transition away from emissions,” Yates said. “The only thing it does is help people producing emissions to know they don’t have to reduce their emissions over the next 10 years.”

He said companies active in renewable energy in Australia would be “better off with nothing” than the current emissions reduction target, pointing to analysis showing the capacity of renewable projects currently under construction already exceeds what is required to achieve the 2030 Neg target of a 26% cut on 2005 levels.

Yates said he understood the rationale that it would be desirable for the major political parties to agree on a mechanism to settle a decade of partisan conflict on climate and energy policy. But he said that, if the policy remained as it is, it should be put on hold until the level of ambition was increased.

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“Agreeing on a mechanism is fine but the mechanism can’t be implemented, it can’t come live, without a meaningful emissions target,” Yates said.

He said if the federal and state governments were not “meaning to use the tool they are generating, leave it in the tool shed – it doesn’t come out of the tool shed until such time as you put meaningful emissions reduction in place”.

Yates’ comments came as the ACT signalled it was possible that it could abstain at the looming meeting of federal and state energy ministers in early August. That meeting will make or break the policy, because implementing the Neg requires consensus from members of the Coag energy council.

The ACT’s climate change minister, Shane Rattenbury, said again on Tuesday he would find it “very difficult” to sign up to the Neg in its present form, and he said he would pursue changes, hopefully in cooperation with other Labor states, when the Coag energy council meets.

Asked whether it was possible the ACT would abstain at the energy council meeting if it turned out that it was the only jurisdiction inclined to sink the scheme, Rattenbury said: “I think it is a technical option in the voting system but we have not got down to that point yet where we are going through the governance rules with a fine-tooth comb”.

“We’ll be doing that in the coming weeks and thinking about our tactics,” he said. “At this stage we are focussed on improving the policy.”

Sections of the renewables industry are marshalling a campaign to exert political pressure on the Victorian and Queensland governments to reject the Neg, with television advertisements put together by Greenpeace and GetUp! set to screen in the two states before the August meeting.

Stakeholders have told Guardian Australia the Andrews government in Victoria, which faces a tough election contest later this year, has responded furiously to the planned television campaign.

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The chief executive of the Smart Energy Council, John Grimes, said on Tuesday that he was consulting with about 400 renewable energy companies seeking an injection of funding for a campaign directed at Queensland and Victoria to bolster the work being done by environmental groups over the coming weeks.

The positioning on the Neg comes as the energy market operator has produced a new forecast suggesting the future of power generation in Australia will be renewables with storage, and gas, with those technologies able to replace the power currently supplied by coal generators at least cost.

The new forecast by the Australian Energy Market Operator suggests existing coal plants should run to the end of their technical life before being replaced with a portfolio of utility-scale renewable generation, storage, distributed energy resources, flexible thermal capacity and enhanced transmission infrastructure.

The energy minister, Josh Frydenberg, who is managing an internal push from Nationals to give taxpayer support to coal as a quid pro quo for supporting the Neg, said the Aemo forecast did not rule out new coal being built but it did point to the falling cost of renewable technologies.

“The report doesn’t preclude a new coal-fired power station being built but what it does point out ... is that there is a declining cost curve for renewables and for storage, and we do need more storage to smooth out the volatility that comes from intermittent sources of generation, namely wind and solar, so the report does point out the facts of the market,” the energy minister told the ABC.

The managing director of Aemo, Audrey Zibelman, told Sky News that existing coal was “more competitive at a cost basis than new resources and ... new coal cannot compete at this point with other resources”.

She said the forecast confirmed “what everybody in the industry has been observing” – that the falling cost of renewables would transform the grid, because renewable energy projects did not pay for fuel, and it would be “very hard” for other technologies to compete with zero fuel cost.