Mr Taylor's attempt to steer the meeting away from discussion of carbon emissions appears likely to be foiled by the ACT, which is expected to seek an amendment asking the government's expert panel, the Energy Security Board, to provide advice on a mechanism to reduce both emissions and energy bills. The federal government's package of energy sector measures includes a default price for electricity consumers, underwriting new power generation and as a last resort, forcing companies to divest assets. Prime Minister Scott Morrison on Tuesday said the changes were "based on the expert reports" provided by the Australian Competition and Consumer Commission. The government is seeking to lower power bills and increase electricity reliability. Credit:Paul Jones However a major ACCC report on electricity prices in July did not recommend divestment powers. Its chairman Mr Sims told estimates on Thursday that the government did not consult him on the new powers to be handed to his agency.

"I can confidently say ... I found out about it when everybody else did, when I read about it in the newspaper," he said. Mr Sims said the ACCC considered the proposal to be "extreme". "Divestiture is such an extreme step that we felt that judgement would be very hard to reach," he said. While others, including former ACCC chief Allan Fels, held a different position, "our view has not changed", Mr Sims said. Labor and business groups are opposed to the move, saying it creates an investment risk and will not lower prices.

The government is considering ways to support investment in new "reliable" energy generation through an underwriting mechanism. While forces within the Coalition are pushing for investment in coal-fired power plants, Mr Morrison insists the government's approach will be technology-neutral and led by the market. The ACCC recommendation said this might take the form of an agreement for the government to purchase energy from a project, but not before it has been operating for five years and had existing customers. Mr Sims told estimates this would make it easier for developers to secure finance, while still ensuring the project was initiated by the market. He said according to the ACCC recommendation, companies that already had a significant share of the generation market would not be eligible for government support. However a consultation paper on the measure released this week does not appear to rule out support for projects in their early stages. This potentially gives the government more influence over which projects get financed. Prime Minister Scott Morrison and Energy Minister Angus Taylor reaffirmed the government's energy overhaul this week. Credit:Dominic Lorrimer The consultation paper does not make established market players ineligible for government support, however such projects would be subject to conditions. The government has also left the door open to underwriting the refurbishment of existing coal plants, when the ACCC said only new generation projects should be supported.

Greens leader Richard Di Natale said the government had distorted the ACCC’s recommendations to suit its own ends. "The Morrison government wants to fund coal at any cost – even if it's clearly the worst option for the taxpayer, shores up the power of big energy companies and most importantly makes climate damage worse," he said. Mr Taylor wants a list of government-backed projects confirmed by early next year. Shadow treasurer Chris Bowen on Thursday said the move was poor policy that risked the national interest, but that a future Labor government would not cancel deals made by a previous government. Treasurer Josh Frydenberg said the underwriting mechanism would seek "to achieve the intent" of the ACCC’s recommendation and that options floated by the government in its consultation paper included that proposed by the commission. Meantime, conservative think-tank the Institute for Public Affairs has disputed claims by the federal government that it is on track to meet its emissions reduction targets under the Paris accord.

Australia has pledged that by 2030, it will cut emissions by 26 per cent based on 2005 levels. Mr Morrison has repeatedly said this will be met "at a canter", despite forecasts to the contrary from the United Nations, the International Monetary Fund and the government's own bureaucrats. In a brief to be sent to federal MPs on Friday, the IPA says "the best available evidence suggests that Australia will not meet its emissions reduction obligations under current policy settings". The institute says Australia should pull out of the Paris deal because meeting the targets would incur "irreparable economic and social costs" and Australia’s efforts "will make no noticeable difference to the global climate". However climate and energy director at progressive think-tank the Australia Institute, Richie Merzian, cited modelling showing an ambitious emissions reduction target above 28 per cent would not significantly affect economic growth. Australia would be a major beneficiary if severe climate impacts were avoided, and should play its fair share in the global climate action task by cutting emisisons by up to 60 per cent, he said.

with Peter Hannam