The Morrison government has embraced a Labor policy to take on more public debt to invest in new energy projects, promising $1 billion for electricity generation, storage and transmission.

The plan will commit more money to the Clean Energy Finance Corporation in a significant policy concession by the Coalition, which tried to scrap the investment agency under former prime minister Tony Abbott.

Investor groups backed the new investment plan but called for a better long-term plan to reduce greenhouse gas emissions, while Labor welcomed the Coalition decision to "mimic" Labor policy.

Energy Minister Angus Taylor and Prime Minister Scott Morrison have announced $1 billion in funding for energy projects. Credit:Dominic Lorrimer

"We welcome any additional funding to the Clean Energy Finance Corporation which is a vehicle that has been shown to work very effectively and which is already returning money to the budget from its investments," said Labor energy spokesman Mark Butler.