New energy policy to save homes $90 a year

The Turnbull government is set to release the final piece of the energy policy puzzle, which will meet Australia's Paris agreement emissions target while saving households more than $90 a year

Coalition MPs will be briefed on the scheme at a meeting in Canberra on Tuesday, following federal cabinet's endorsement of the idea which emerged out of the new independent Energy Security Board.

While the government accepted 49 out of 50 recommendations of Chief Scientist Alan Finkel's landmark review of the electricity sector, it has yet to respond to his idea of a clean energy target.

It is understood economic modelling of the alternative to the clean energy target - the name of which will be revealed on Tuesday - delivered price cuts deeper than under Finkel's mechanism.

The annual benefit from the CET came in at $90 a year for households, while large industrial users were expected to pay about 20 per cent less a year.

At the same time, the modelling showed the new mechanism would enable Australia to achieve its commitment of a 26 to 28 per cent reduction in 2005 emissions by 2030.

Blackouts would be minimised with power generators and storage providers, such as hydro and batteries, covered by a new "generator reliability obligation", as recommended by Dr Finkel.

Adequate dispatchable power would be required in all regions of Australia to ensure consumer demand is met, with the obligation being met using a variety of technologies.

The independent Energy Security Board is understood to have unanimously recommended the plan.

Prime Minister Malcolm Turnbull has been under pressure from coalition colleagues to ensure his emissions policy does not push up power bills.

Former minister Eric Abetz described it as a case of "putting pensioners' pockets ahead of Paris purity".

Labor wants the government to commit to a clean energy target, as recommended by Dr Finkel.

Power prices have risen in real terms by 63 per cent over the past decade.

About 40 per cent of the rise has been due to the higher costs of poles and wires, with a quarter due to retail costs and margins, 20 per cent higher generation costs and one-sixth due to green costs.

As well, high gas prices are impacting on households, making it harder for businesses to operate and preventing an expansion of gas-powered electricity generation.

Business Council chief Jennifer Westacott says all parties should take time to consider what the government delivers before criticising it.