The Turnbull government is hinting that the rapidly declining cost of renewable energy is undermining the case for further clean-energy subsidies, as it maintains it will make a decision on a clean energy target in coming months.
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In a speech to the Australian Financial Review's National Energy Summit in Sydney on Monday, Energy Minister Josh Frydenberg has emphasised the "declining cost curve" for wind, solar and renewables storage.
"Globally in the past seven years, the cost of wind-powered generation has more than halved. Domestically, solar PV costs have dropped more than 50 per cent," he said.
"By 2020, costs of battery technologies are expected to fall 40 to 60 per cent and over 70 per cent to 2030.
"It is against this backdrop of a declining cost curve for renewables and storage, greater efficiencies that can be found in thermal generation, and the need for sufficient dispatchable power in the system, that we are considering the Finkel Review's 50th recommendation - to which we'll respond before the end of the year."
The government has accepted 49 of the 50 recommendations of Chief Scientist Alan Finkel's review of the National Electricity Market. However the recommendation for a clean energy target - which would drive investment in renewables and bring down emissions, and which the government did not accept - has divided the Coalition, preventing a decision on its future for four months.
Many of the other Finkel recommendations will have a "profound impact" on the electricity market, Mr Frydenberg said.
The minister's speech - which appears to signal that he is backing away from a clean energy target - is likely to please conservative Coalition MPs, who have argued hard against the measure.
In his speech at the same event, Opposition Leader Bill Shorten will reiterate Labor's willingness to negotiate with the government on a "fair dinkum" clean energy target.
"This does not mean compromise at any cost. A framework that isn't fair dinkum will not receive our support," Mr Shorten will tell the conference.
"But there must be a way through. I don't imagine we will get everything we want, and the LNP may not get everything they want. But that cannot mean we throw up our hands, return to our trenches and resume hostilities. It cannot mean choosing insults over ideas or bringing props into the Parliament instead of policy."
Mr Shorten believes there are some conservatives within the Coalition who will never vote for a clean energy target in any form.
"But Labor has 69 votes in the House of Representatives - and we are ready to vote for a clean energy target," he will say.
But Mr Frydenberg says that the transition to lower emissions cannot come at the expense of the reliability and affordability of the electricity system.
"Should reliability and affordability be compromised, public support for tackling climate change will quickly diminish and previous gains lost. This is in nobody's interest," he said.
"It is challenging but possible to simultaneously put downward pressure on prices and enhance the reliability of the system, while meeting our international emissions reduction targets."
