Australia’s political leaders have not yet reached a decision to cap coal and gas prices but “temporary” interventions are on the table.

Energy Minister Chris Bowen met with his state and territory counterparts to discuss long-term strategies to drive down power prices and the next steps in Australia’s transition to renewables.

The ministers also discussed a model for a capacity mechanism, something Mr Bowen said had been in the “too hard basket” for too long.

“It’s really a keep-the-lights-on mechanism to ensure that our transition to renewables happens more quickly and in a more orderly fashion,” he said.

The proposed capacity mechanism is expected to guarantee energy supply without undermining emissions targets or being used as an excuse to keep coal and gas generators operating.

On Friday, Prime Minister Anthony Albanese will meet virtually with premiers and chief ministers for national cabinet, after he tested positive to COVID-19.

Asked if the government had resolved to cap the wholesale coal price at $125 and the gas price at $13 a gigajoule, Treasurer Jim Chalmers said no.

He said one level of government could not work alone to address the issue and it needed collaboration from all.

“We are very concerned that the prospects of higher energy prices … There is a case here for temporary, responsible, sensible but meaningful interventions in the markets, to see if we can take some of the sting out of these high energy prices,” he said.

“This is a challenge of such complexity and such consequence for industry and for Australians around the country, that it needs to be a genuine partnership between governments.”

Victorian Premier Daniel Andrews told reporters while the onus was on the Commonwealth to put an energy plan forward, the states would consider it.

“We will give that the proper and important consideration. But no, I can’t commit one way or the other,” he said.

“A national domestic gas reserve is very important. We should not be paying European prices for our gas. Our gas should be for our households and our businesses first.”

However, NSW Energy Minister Matt Kean said his state was almost set to sign up to a price cap on coal.

Mr Kean said NSW was “prepared to take the hit”, indicating consumers needed to come first and not royalties to the state government.

Federal opposition spokeswoman Karen Andrews said the government was yet to explain what is was planning and how this would affect consumers and had not confirmed if negotiations with energy generators had taken place.

“The federal government hasn’t gone in with a longer term plan, a longer term vision … and now they’re in a position of scrambling around,” she said.

– AAP