Labor criticised for current energy hole

Electricity poles and wires in Melbourne
Victorian has ruled out including fossil fuels in the proposed capacity mechanism. -AAP Image

The federal opposition has criticised the government and the Victorian government for not doing enough in the short-term to prevent energy prices spiking. 

A proposed capacity mechanism is being discussed by state and territory energy ministers as a tool to ensure reliability of power supply amid an unprecedented period of transition but it will not come into effect until 2025.

Coal and gas - as well as renewable power technology - would be eligible for payments, with the market operator responsible for forecasting, buying enough capacity and determining demand.

Liberal senator James Paterson says the government needs to take responsibility for any blackouts that happen on its watch after Victorian Premier Dan Andrews ruled out including fossil fuels in the capacity mechanism.

The Energy Security Board moved to include coal and gas in the mechanism to shore up supply while the country transitions to renewables.

"It's a very big call by Victoria to say that they can get through this winter without any blackouts without relying on any incentive payments at all to bring more gas or coal into the system, and it's a very big call by (Energy Minister) Chris Bowen to let them get away with it," he told Sky News.

"If there are blackouts in Victoria this winter, it won't only be the fault of the Andrews government and its ideological pigheadedness on these issues, it will be (the fault of) Chris Bowen for being weak and not pulling them into line. 

"He's got to take responsibility."

Labor MP Peter Khalil hit back at the Liberals, saying the current strain on the power grid was a legacy of nine years of underinvestment in renewable energy.

"The reality is this, the government has had to act because nothing was done for nine long years. It was a complete mess," Mr Khalil told Sky News.

"The really important element about all of this is that Chris Bowen has successfully found a way to provide some certainty going forward as we transition to renewables."

But Senator Paterson said the incoming prime minister had all the information available when he took over the job when he promised power bills would be reduced by $275 under his watch.

"It's all very well and good to blame your predecessors but if there are blackouts on his watch, Anthony Albanese has to take responsibility for that," he said.

"He knew everything he needed to know about the state of the electricity market a few weeks ago ... and yet he's already walking away from that commitment."

Mr Albanese said the situation had greatly improved following the emergency measures.

"Certainly the situation is looking better today than it was five days ago," he told ABC radio on Monday.

The government is aiming to have 82 per cent renewables powering the energy market by 2030, and recently updated Australia's emissions target with the United Nations.

Mr Albanese said he did not believe allowing coal and gas in the technology-neutral capacity mechanism would hinder the move to renewables.

"No, it doesn't, and if you look at what the ESB have said they have made it very clear."

The gas industry says the capacity mechanism is a pragmatic solution to keeping the lights on.

"Gas is a win-win. With coal in shutdown mode, gas has been the only thing keeping the lights on in parts of Australia," Gas Energy Australia CEO Brett Heffernan told AAP. 

"It's clean now, but getting even cleaner with renewable gases that deliver net zero emissions in active development."

He said it made sense to lock in Australian gas as "the most reliable back-up", especially as solar and wind could not deliver the same reliability.