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The government says it will lower the wholesale electricity price by 25 per cent.Credit:Bloomberg

The wholesale market is where energy generators and retailers trade electricity. Wholesale costs comprise about one-third of household electricity bills,and a greater share for industrial customers.

Mr Taylor's announcement was an attempt to refocus public attention on the government's election promise to make electricity more affordable and reliable. The Coalition has been under heavy scrutiny throughout the election campaign for its lack of ambition on climate policy,including the absence of measures to cut emissions from the polluting electricity sector.

Mr Taylor said the Coalition would achieve the price target by improving competition in the electricity market by underwriting investment in new"reliable"power generation. Its shortlist of projects includes the upgrade of a NSW coal plant.

Angus Taylor's announcement was an attempt to refocus public attention on the government's election promise to make electricity more affordable.Credit:Nine

However,University of Melbourne energy expert Dylan McConnell said prices around $70 a megawatt hour were telegraphed by the government's own energy bodies earlier this year.

"They seem to be taking credit for something the market already expects to happen,"Mr McConnell said.

When Mr Taylor took office as Energy Minister in August 2018,the wholesale price for that quarter was about $86 a megawatt hour in NSW and Victoria. Forecasts by the Australian Energy Regulator and ASX Energy Trading Futures suggested the price would fall to about $70 a megawatt hour in 2020.

Grattan Institute energy director Tony Wood said the ACCC report on which the government was relying attributed future drops in the wholesale price to a wave of new renewable energy in the electricity mix.

However technical issues,such as competition for grid connection,meant the influx"hasn't quite happened"yet,and not all new supplies in future were guaranteed,he said.

Mr Wood added that the new renewables supply was largely the result of federal and state Labor policies.

"Some of them will happen,but they're not happening because of what the government is doing,"he said.

Victoria Energy Policy Centre director Bruce Mountain said the three big energy companies - AGL,Origin and EnergyAustralia – controlled the wholesale market which kept prices high. He rejected suggestions that a small amount of new electricity supply stemming from the government's underwriting proposal would bring wholesale prices down.

Labor's climate change and energy spokesman Mark Butler said power prices had skyrocketed under the Coalition.Credit:Alex Ellinghausen

The companies were approached for comment.

Labor's climate change and energy spokesman Mark Butler said the government's own modelling on the National Energy Guarantee projected wholesale power prices of $48 a megawatt hour in 2021 without the policy.

He said the $70 per megawatt hour price target was a 44 per cent increase on this.

"The chaotic Abbott-Turnbull-Morrison Government's energy crisis has seen 13 energy policies in six years and skyrocketing power prices,"he said.

However Mr Taylor said the modelling in question included assumptions that have not been realised. This included a predicted wholesale price this year of $76 per megawatt hour – far less than the actual current price.

He said the calculations were"based on the achievable savings numbers"outlined by the ACCC.

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