Households could save $90 a year and businesses even more while the likelihood of blackouts drops and carbon emissions are cut under a new national energy plan.
Chief Scientist Alan Finkel briefed the prime minister and premiers in Hobart on Friday on his 212-page report into the future of Australia's electricity market.
Dr Finkel told reporters energy costs would be 10 per cent lower under his plan - which includes a new clean energy target (CET) to encourage investment and improvements to the management of the national electricity market - than under a business-as-usual scenario.
It is understood the annual benefit equates to about $90 a year for households, and large industrial users could pay around 20 per cent less per year.
Under the CET, generators would receive certificates for the electricity they produce in proportion to how far their emissions intensity is below a set threshold - which Dr Finkel has left to governments to determine.
New eligible generators would receive certificates for all electricity generated, while existing eligible generators could receive certificates for any electricity that they produce above their historic output.
The CET would replace the existing renewable energy target in 2020, but to be most effective would need the states and territories to axe their own targets.
Malcolm Turnbull told reporters the government would look at the clean energy target "very favourably".
The prime minister said the two benefits were its neutrality in terms of technology and the fact it would smoothly follow on from the existing RET.
Anticipating a backlash from coalition colleagues who are advocating more coal-fired power, he said the target would not prevent the use of coal but "would provide an incentive for lower emissions technologies".
Dr Finkel said under his proposed CET by 2030 coal would provide 53 per cent of Australia's power, while gas would provide five per cent and the remainder would come from renewables such as large-scale solar, rooftop solar and wind.
This would provide a "credible mechanism" to enable Australia to achieve its Paris agreement commitment of a 26 to 28 per cent reduction in 2005 emissions by 2030.
Labor climate spokesman Mark Butler said the opposition would carefully consider the report and seek to work with the government on a bipartisan energy policy.
But he rejected the idea of a clean energy target that accommodated new coal-fired power.
"Wholesale power prices have doubled under the Turnbull government as a result of an investment strike in new generation caused by policy paralysis," he said in a statement.
Greens leader Richard Di Natale said the review amounted to a plan to "keep polluting coal and gas burning for another 50 years".
Dr Finkel expected coal-fired generation would decline over the coming three decades and new investment in it was unlikely to be made.
To enable new generation to be brought online and the jobs impact minimised, power generators should be required to give three years' notice of their intention to close.
New generators would be compelled to guarantee they can supply electricity when needed for the duration and capacity determined for each region through a new "generator reliability obligation".
Dr Finkel recommends a new Energy Security Board should take control of his blueprint.
Gas would play an essential role in providing secure and reliable electricity, but this would need better oversight and greater supply.