The Turnbull government is set to announce a major repositioning of Australia's energy and emissions policy after cabinet signed off on a plan to scrap all renewable energy subsidies in future, mandating instead the use of sufficient "reliable" energy like coal and gas to avoid blackouts.
Fairfax Media understands the government believes it will be able to do this while still meeting the nation's emissions reductions targets under the Paris Agreement.
The plan relies on a growing market uptake of clean energy due to a combination of consumer preference, falling renewables costs, and technological advances in power storage.
But that side of the wholesale market will be buttressed by a minimum component of base-load generation sourced by each retailer through coal and gas.
The proposal will be taken to the joint Coalition party room on Tuesday morning. In a sign of the sensitivity of the energy/emissions policy mix, Mr Turnbull is also set to appoint his former chief of staff, Drew Clarke, to be head of the Australian Energy Market Operator to help drive innovation and ensure reliability, according to the ABC.
The long-awaited policy declaration will scotch faint hopes of a cross-party consensus over climate change and soaring household and energy bills, after Labor had offered to embrace what it said was the second best option of a clean energy target as recommended by the Finkel review.
"The Energy Security Board, which comprises an independent chair and deputy chair as well as the heads of the Australian Energy Markets Commission, Australian Energy Regulator, and AEMO, and was formed following the Finkel review, has unanimously recommended the new plan as the best way to deliver affordable, reliable electricity while at the same time lowering emissions consistent with the Paris Agreement," a source said.
Facing intense internal resistance from Nationals and conservatives led most vocally by Tony Abbott, the government has decided not to go with Dr Finkel's proposed clean energy target, arguing it is not needed.
Instead it favours a mix of technological advances, arguing the targets can be reached without specific subsidies and that its approach will cut household energy bills more than would be the case under the target.
Its new plan was designed by Energy Security Board, and means electricity retailers would be required to meet a reliability benchmark and a separate low emissions benchmark.
That would mandate sourcing electricity from traditional "reliable" energy such as coal and gas, so that they can guarantee supply, and then a component from renewables such as wind and solar.
How the companies structure their wholesale energy acquisition would be a matter for them as long as they met the benchmarks.
While the proposal sounds similar to the current renewable energy target, a source said it differed fundamentally because it would not stipulate how that overall reliability, low-emissions "profile" was achieved and did not require retailers to purchase certificates with those costs passed on to consumers.
Details of the new framework remain to be released, but critics are likely to argue that if the electricity system is not required to do the "heavy lifting" of economy-wide emissions reduction, then other sectors such as industrial processes, agriculture, and transport, will be asked to do more - and at greater economic cost.
The politically bold move represents a significant shift in rhetoric for Prime Minister Malcolm Turnbull who once said he would not lead a party that was not as serious about climate change as him.
Since the beginning of the year, Mr Turnbull has been openly attributing falling reliability and sky-rocketing power bills to the "ill-conceived" rush to non-synconous electricity supply from wind and solar without adequate back-up generation.
His principle example has been South Australia, which has invested in significant wind and solar generation projects and which sometimes meets its entire need from these sources.
However, the state is more reliant on the national grid than it used to be when the wind is not blowing and the sun is not shining, and suffered a catastrophic statewide blackout just over a year ago when that grid interconnector was also down.
In Parliament on Monday, Mr Turnbull decided to make weakness a strength by accusing Labor of having had every position available on climate policy.
He taunted the opposition for being ideologically driven, telling the House there are many approaches to energy policy, to which Labor frontbenchers chided back, "yeah and you've tried them all!".
The Turnbull plan looks to have averted a showdown with anti-climate change MPs led by Mr Abbott who were gearing up for a fight if a clean energy target was favoured.
Conservative Nationals MP Andrew Broad said he was happy with the level of consultation undertaken by Mr Turnbull and Energy Minister Josh Frydenberg.
However he provided his own multi-point plan for resolving Australia's high electricity costs, which he said was more keenly felt in rural industries where processes such as refrigeration are critical.
It was based on using traditional energy supplies, as well as improved transmission infrastructure so when one area's wind or solar power was down, electricity could be sourced from another area.
"What we're actually seeing, which is really interesting, is that some of the cool stores, so people pick their fruit, they put it in the cool store waiting to load into a shipping container, they're now spending $40,000 to put a diesel generator on just in case," he told Sky News.
Mr Broad said he expected the Paris target of emissions reduction of 26 to 28 per cent on 2005 levels by 2030 could be achieved with "science" rather than subsidies and regulations.
