Prime Minister Malcolm Turnbull has defended nixing the clean energy target in favour of a new plan that demands electricity retailers provide sufficient baseload power while also reducing emissions.

Despite criticism from former prime minister Tony Abbott, the proposal was supported by the Coalition partyroom on Tuesday morning and is projected to save households an average of $110-$115 a year between 2020-2030.

Labor immediately accused the Prime Minister of capitulating to “Tony Abbott’s radical right wing agenda”, but Mr Turnbull defended the decision on Tuesday, saying the new policy was superior to the clean energy target.

“What we’re doing is committing to ensuring that our energy policy delivers affordable, reliable power and that we meet our international commitments,” he told Question Time. 

Mr Turnbull declined to “guarantee” prices would fall, noting the savings projections came from the Energy Security Board – a group of regulators.

He said prices would be lower under the new policy than Chief Scientist Alan Finkel’s clean energy target.

But he stressed the policy was a recommendation of the Energy Security Board and demanded Labor “get on board’ and support it.

“What we have is a recommendation from an expert board, appointed by COAG, appointed by more Labor governments than coalition governments,” he said.

How will it work?

The new plan, called the National Energy Guarantee, consists of a “reliability guarantee” and a “emissions guarantee”.

Retailers will have to provide a minimum amount of baseload power from coal, gas or hydro, while also providing a specified level of low emissions energy. They can meet these requirements however they choose.

Tony Abbott is led the push against a clean energy target. Photo: AAP

The Renewable Energy Target will also end in 2020, meaning such technology not receive subsidies from that point.

The government spruiked the regulators’ projection that the policy would save households an average of $110-$115 a year between 2020-2030.

But Sky News later reported John Pierce, head of the Australian Energy Market Commission – a member of the Energy Security Board – said some modelling suggested savings would start at $25 a year or 50 cents a week.

Mr Turnbull and Mr Frydenberg emerged from a two and half hour Coalition partyroom meeting with the new policy, despite backbenchers including George Christensen and Mr Abbott raising concerns.

Mr Abbott is understood to have welcomed the move to ditch the clean energy target but raised concerns about the impact of prices. He also reiterated his call to build a coal-fired power station.

A government source noted the criticisms of two MPs but said that “almost all” of the 30 MPs who spoke endorsed the plan or simply wanted to ask questions.

Labor’s energy spokesman Mark Butler slammed the government’s proposal. Photo: AAP

Labor’s energy spokesman Mark Butler said the opposition would “wait to see the detail” but that early signs showed the government was “hell bent on destroying renewable energy in this country”.

“This morning Malcolm Turnbull turned his back on his own Chief Scientist and the coalition of support that existed for a clean energy target and he turned his back on renewable energy in Australia,” he said.

The “reliability guarantee” will require discussion with the states while the framework to reduce emissions will need to the win the support of the Parliament.

One Nation claimed credit for the government’s move away from subsidised renewables, though Senator Malcolm Roberts, who is a climate change sceptic, also described the new plan as “atrocious”.

Greens energy spokesman Adam Bandt said the government had capitulated to “climate terrorists” on its backbench.

“Malcolm Turnbull has served up a policy that means more coal and less renewables, which means more bushfires, worse heatwaves and longer droughts,” he said.