Turnbull government is working on a major redesign of the clean energy target.

The Turnbull government is working on a major redesign of the clean energy target that will likely fall short of the plan for almost half of Australia’s electricity to be generated by renewables by 2030.

Internal discussions have commenced about a revised target that would set a higher emissions baseline than the 0.6 tonnes of carbon per megawatt hour suggested by the Finkel review. The revised scheme would allow high-efficency, low-emission coal-fired power plants that emit about 0.7 tonnes of carbon to receive partial certificates, or credits.

Political hard-heads in the Coalition believe that if the government were to adopt the 42 per cent target proposed by Chief Scientist Alan Finkel, which is not far short of Labor’s 50 per cent target, the government will not be able to win a fight that frames the opposition as the party of higher power prices at the next election.

As one MP put it, “if we were going to do Finkel’s CET, it would be done already”.

More broadly, a shift is now underway on energy policy within the government to fight Labor on the need for affordable, reliable base load power – a theme the prime minister regularly returns to – and appeal directly to households struggling with higher energy prices.

There are hopes the revised energy plan will be agreed to by the end of the year.

Meanwhile, Australian Energy Market Commission chairman John Pierce said the lack of a credible, long-term mechanism to achieve Australia’s emissions reduction commitments has created uncertainty and deterred investment in the sector.

Labor attacked the government over power price rises under the Coalition’s watch on Tuesday, while Opposition Leader Bill Shorten asked Mr Turnbull in Parliament on Tuesday “whatever happened to the clean energy target?”

Josh Frydenberg and Malcolm Turnbull in Parliament on Tuesday. Photo: Alex Ellinghausen

In comments that were widely noted by Coalition MPs, the Prime Minister said Dr Finkel’s recommendation for a clean energy target was “under consideration” but that “we need to make sure that we get the energy market right this time”.

“We need to ensure that the energy market design provides a suitable framework for investment that doesn’t simply get new generation, but gets generation of the right kind,” he said.

Clean energy target: Chief Scientist Alan Finkel. Photo: Daniel Munoz

This comment was interpreted as a sign that opposition to Dr Finkel’s target from National Party and the conservative wing of the Liberal Party, which has hardened in recent weeks, will be heeded by Mr Turnbull and Energy and Environment Minister Josh Frydenberg.

Earlier on Tuesday during a meeting of the Coalition party room, former prime minister Tony Abbott congratulated Mr Turnbull and deputy Liberal leader Julie Bishop for their focus on cheaper power prices.

Andy Vesey from AGL in Canberra on Monday. Photo: Andrew Meares

But he added a rider backed by other Coalition MPs that “if we graft a clean energy target on top of the Renewable Energy Target, that will be a difficult position to sustain”.

As a second MP put it, “Malcolm is saying he is only interested in outcomes. It’s not that we won’t have a CET, it’s just secondary to having affordable, reliable power”.

Mr Frydenberg has argued an Australian Energy Market Operator report released last week – which warned of a major shortfall in base load power triggered by the scheduled Liddell power plant closure in 2022 – has “reset the debate”.

Following that report, the government ramped up pressure on AGL chief executive Andy Vesey to keep Liddell open beyond 2022, or sell it to a competitor – proposals Mr Vesey agreed on Monday to take to his board, along with a replacement renewables plan, in 90 days.

Mr Turnbull kept up the pressure on AGL, arguing the “most obvious” solution was to prolong the life of Liddell.

Deputy Prime Minister Barnaby Joyce, meanwhile, taunted the company to sell the Liddell plant – “if it’s such a bad asset” – to one of its competitors during an interview on Sky News.

Mr Joyce said estimates of $500 million to $1 billion to keep Liddell going beyond 2022 were “in a good range” and added he knew of two parties who wanted to buy it, though he would not say who. Delta Electricity has already indicated a willingness to kick the tyres on the plant, which is Australia’s oldest coal-fired plant.