With one eye on the looming federal election, the Coalition says delivering more affordable energy for voters is its top priority. It says an underwriting mechanism to support investment in new power generation would reduce prices and back up intermittent electricity produced by wind and solar. Prime Minister Scott Morrison, right, and Energy Minister Angus Taylor unveiling government energy plans last month. Credit:Alex Ellinghausen / Fairfax Media Conservative Coalition forces are pushing for investment in coal-fired power plants however Prime Minister Scott Morrison insists the government's approach will be technology-neutral. Uncertainty around the financial risks posed by greenhouse gas pollution from new coal projects, such as the costs incurred under a future carbon price, is a major hurdle to such proposals getting off the ground. A carbon price is a cost applied to companies according to the volume of greenhouse gas they emit. Even the resources sector says such a measure is inevitable as the need to tackle climate change intensifies.

Mr Taylor last month suggested the government is considering guaranteeing coal projects against a future carbon risk, saying "what's crucial is that we ensure that new capacity can come into the market ... and that means making sure that government carries as little risk as is necessary but as much as we need to make sure we get that reliable power into the system". Oliver Yates, former chief executive of the Clean Energy Finance Corporation and a veteran Liberal Party member, told Fairfax Media that the government was effectively "subsidising a coal-fired power station" if it underwrites its carbon risk. "The government is going to expose itself to a risk that the private sector wouldn't take," Mr Yates said. "If [Mr Taylor] thinks the taxpayer should take a risk that the private sector is unwilling to take then that's extraordinary ... Is it irresponsible for the government to take that risk? In this circumstance it is." Should Mr Taylor decide the government will absorb a project's carbon risk, he should give equal subsidies to alternative clean energy projects such as wind and solar, "otherwise he's creating an unfair market", Mr Yates said, saying the indemnity approach was "absolutely not technology-agnostic".

Former Clean Energy Finance Corporation chief Oliver Yates says any government move to protect coal projects from their future carbon risk amounted to a taxpayer-funded subsidy. Labor has also opposed the carbon risk protection, saying it could cost taxpayers billions of dollars. In response to the criticism, Mr Taylor said the Australian electricity market "has seen years of market intervention that has led to a fundamentally broken model. The Morrison government is taking only those actions required to address the distortion caused by the years of interventions." At the Wednesday meeting with electricity retailers Mr Taylor will discuss his aims to drive down power costs, including plans for a regulated default power price and a comparison price against which regulated and discounted offers can be measured. He will also discuss the underwriting proposal. Mr Taylor on Tuesday said his government wanted "a fairer deal for Australian families and small businesses. I will be emphasising that at the roundtable."

While the government has suggested that reducing household power bills will be the main focus of the meeting, it is illegal for electricity retail competitors to discuss price setting in a public forum as it could be considered cartel behaviour. One electricity retailer told Fairfax Media that the Australian Competition and Consumer Commission "have been pretty clear what you can and can't do with about 30 retailers in the room". Another said the cartel concerns meant "the expectations created about price reductions can't be delivered or discussed at this meeting". Grattan Institute energy director Tony Wood said the government could not force price reductions, and would seek to claim any progress from the meeting as a win. "The government have made a big deal about this so by the end of the meeting it will be hard for the government to walk away with nothing, even if it's a small concession," he said.