Prime Minister Malcolm Turnbull says he has "no doubt" he will adopt a recommendation to help new power generators enter the market by underwriting their investments, speaking ahead of key energy meetings with both the states and his own party room.
The debt guarantees were among a recommended by the ACCC last month, when the consumer watchdog released a report on the country’s energy grid.
ACCC chair Rod Sims said he knew there were “a lot of newcomers” who wanted to invest in new projects but were struggling to get finance from the banks.
He said he was most aware of potential gas-fired plants and renewables paired with batteries.
The prime minister has promised colleagues he would adopt the measure, The Australian reports, as he tried to assuage the over the government’s energy plan.
"That's a very good suggestion, and I have no doubt that we will adopt that," Mr Turnbull told reporters in Alice Springs.
The prime minister said the guarantees could be used to bring all sorts of new energy projects on to the market.
"It could be hydro, it could be gas, it could be renewables backed by hydro or gas or batteries, it could be gas alone, It could be coal."
"I'm sure that we will adopt it in one form or another, but we've got to get the design right."
The government will push the states and territories to sign up to its National Energy Guarantee on Friday, but the prime minister also needs to secure the support of the party room at a meeting on Tuesday.
Victoria is already threatening to ditch the deal unless a series of demands were met.
Labor states want the government’s 26 per cent emissions reduction target to be contained in a regulation that is easy to increase in future years, rather than enshrining it in legislation.
"We've been very clear, we want this to work," Victorian energy minister Lily D'Ambrosio said on Wednesday.
"But for it to work it's got to be flexible, and it's got to not tie the hands of future federal governments."
Opposition leader Bill Shorten said the prime minister should "listen to the states" rather than "giving them another lecture from on high".
He said the Coalition needed to get over its "bias against renewable energy".
Mr Turnbull's comments are the firmest indication so far that the government will adopt the ACCC proposal to underwrite new generation projects by promising to buy electricity off them in a fixed-rate back-up plan, making it easier for new players in the industry to get loans.
Mr Sims said the debt guarantees would be among the least controversial of the ACCC’s recommendations because the government would rarely need to pay the money.
He said banks were often unwilling to finance new generation projects because they could not guarantee long-term income from big industry buyers.
Under the proposal the government would promise to buy power in the later years of a new plant's life, so the company could go to the banks with a solid prospect of a return on investment.
