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Turnbull, premiers in power struggle

AAP logoAAP 7/12/2016

Malcolm Turnbull will go into a meeting with the premiers arguing they must not push up power prices and reduce reliability by imposing more renewable energy.

The prime minister's warning on Thursday came as South Australian premier Jay Weatherill said he and other state leaders could go it alone on an emissions intensity scheme as they committed to their own ambitious renewable energy targets.

The scheme - which has industry backing - could involve an emissions baseline being set, with electricity producers generating emissions above it having to buy credits from those below it.

The Council of Australian Governments meeting in Canberra on Friday will receive an interim report by chief scientist Alan Finkel, who will outline his thoughts on reform of the electricity sector following SA's blackouts, and is likely to back a scheme similar to that proposed by Mr Weatherill.

Mr Weatherill said that in the absence of national leadership on an emissions scheme, he would seek support from state colleagues to team up.

"Our first instinct is of course to seek a national scheme," he said.

Mr Weatherill said power prices in SA would go down if an emissions intensity scheme was adopted.

It would also encourage more base-load gas generation and increase competition, he said.

Before COAG, the chief executives of Australia's top energy retailers, distributors, transmitters and generators released a statement backing an emissions intensity scheme for the electricity sector or an economy-wide price on carbon dioxide.

"Without material changes to better integrate carbon and energy policy in national frameworks, Australian energy customers will pay more than necessary or face more supply risk in the transition to achieving a cleaner energy system," the chiefs said.

However, state-based systems would be a "second-best measure".

Mr Turnbull said he would always support lower power prices.

"South Australia ... have the highest prices for electricity in Australia and they can't even keep it on," he told reporters in Armidale.

Mr Turnbull said it was important Australia remained committed to its emission reduction targets, but not at the expense of households and businesses.

Following weak economic growth in the September quarter, Deputy Prime Minister Barnaby Joyce said the nation would avoid recession as long as it didn't embark on "some philosophical jihad" about renewable energy.

Opposition Leader Bill Shorten said Mr Turnbull - who has previously backed an emissions trading scheme - had become a "complete coward" on climate change, and was gagged from taking action by the right wing of his party.

"He himself said he wouldn't want to lead a political party which didn't believe in taking action on climate change," Mr Shorten told reporters in Sydney.

Mr Shorten said a co-operative national approach to renewable energy and tackling emissions would provide new jobs at a time the economy was struggling.

"We will miss out on a whole lot of investment in blue-collar jobs which we would otherwise get if we had sensible market-based policies to deal with the harmful effects of climate change."

Mr Weatherill told reporters in Adelaide on Thursday the prime minister was denying Australians an average $216 a year saving on power bills by rejecting a national emissions intensity scheme.

"It's just extraordinary we have a prime minister who has abdicated his national responsibility to take action to create a national energy policy," Mr Weatherill said.

He said nine coal-fired power stations had closed across Australia and energy prices were rising across the country, not just in South Australia.

Mr Turnbull was paralysed by conservatives within the coalition and the Liberal party was "captured by coal interests", Mr Weatherill said.

Queensland Premier Annastacia Palaszczuk told reporters in Canberra on Thursday she did not agree with her South Australian Labor colleague on the need for an emissions intensity scheme.

But she agreed national energy policy was "simply a mess".

Ms Palaszczuk said she was happy with Queensland's energy mix and renewable energy target, but some "sound policy" at a national level would be useful.

The premiers won't be attending the usual pre-COAG dinner at the prime minister's residence, The Lodge.

Victorian Premier Daniel Andrews said he had no plans for Victoria to launch a state-based emissions trading scheme, although he would be interested in hearing what Mr Weatherill had to say.

He said Australia was the only country in the world to have had a market-based mechanism and got rid of it.

"It would be much better if we had national leadership from the national government but I don't think that will come any time soon," he told ABC television .

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