A global energy body has criticised Australia's lack of a long-term climate policy and urged a swift embrace of electricity market reform.
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The International Energy Agency's four-yearly review of the country's energy policies, released on Thursday, focuses on the transition to a low-carbon economy and the role of gas - areas chosen by the federal government for special scrutiny.
It says the resilience of Australia's electricity system is being tested with the transition happening at a faster pace and scope than expected.
However, the IEA says despite pledging to cut emissions under the Paris climate agreement, the federal government "has not yet come forward with durable climate change policies after 2020" nor named a long-term goal.
It notes that while Australia has cut the emissions intensity of its electricity sector by 15 per cent since 2005, it is still the highest of any IEA member country and double the average.
"The country is not subject to any effective carbon constraint or rate under the Emissions Reduction Fund and its safeguard mechanism," the report states.
"Current energy efficiency measures and climate mitigation policies are not sufficient. To meet its 2030 target, domestic efforts need to increase."
While the agency sees the national electricity market, covering the east coast states, as a world-leader, the IEA warns greater collaboration on energy security is needed.
"The energy policy governance in Australia is very complex and fragmented," it states.
"It suffers from frequent changes of policy direction and institutions at commonwealth level."
A stable and longer-term framework of climate and energy policies is critical for both investors and consumers.
The Turnbull government has proposed a national energy guarantee to ensure a reliable and lower emissions electricity sector.
The IEA says this could be an effective market-based mechanism provided the government can ensure more competition, better connection between the states and stronger rules for the integration of renewables.
"We don't know the details (of the NEG) yet but looking at the concept and the highlights, I would say that this is a golden opportunity for Australia to study and to bring the energy and climate targets together," executive director Fatih Birol told reporters in Canberra.
However, the report warns the policy couldn't become a silver bullet solution.
Energy Minister Josh Frydenberg says the IEA's 52 recommendations align with what the government is already doing.
"In particular, the national energy guarantee goes towards the review's overarching recommendation for a stable, enduring policy response so that Australia can manage the energy transition already taking place," he said.
Dr Birol briefed a group of about 100 stakeholders including Liberal, Labor and Greens MPs on the IEA report on Thursday morning.
Greens energy spokesman Adam Bandt said the IEA made it clear the overwhelming majority of pollution cuts for Australia would come from renewables and energy efficiency and that was where the government should be spending its money.
Australian Associated Press
