Politicians looking to make electricity secure, reliable and affordable for Australians need to make sure they take decisions consciously, rather than cobbling together ad hoc policy ideas.
Taking a disjointed approach could ultimately lead to the destruction of the national electricity market, energy experts from the Grattan Institute warn.
A new report from the think tank says high electricity prices, like those Australia is experiencing now, would normally encourage new investment but the lack of cohesive energy and climate policies means that largely hasn't happened.
"Instead of providing clear policy direction and supporting market reforms, governments have stepped in with uncoordinated interventions themselves," the report by Grattan's energy program director Tony Wood and energy fellow David Blowers says.
They highlight South Australia's energy policy including building a new big battery, federal studies into expanding hydro schemes in Tasmania and NSW, and federal investment in a solar thermal plant at Port Augusta.
"These may score political points but, in the absence of an integrated, national approach, could also make things worse."
They warn government funding of new generation capacity sets risky precedents and could deter future private sector investment.
It says 2017 will present a fork in the road for governments to effectively choose between using markets or central planning and regulation to drive Australia's energy market into the future.
But whatever the choice, it must be taken consciously, cohesively and with all jurisdictions co-operating.
"We've already seen the evidence of what happens when you don't have comprehensive policy integration," Mr Wood told AAP.
"Lots and lots of things have been going wrong but the core issue is the lack of climate policy."
The report recommends urgent changes to the rules operating the national electricity market to set it on the right track before next summer.
It also says governments need to agree on a credible plan to cut pollution.
This needs national leadership but, if the federal government won't step up, a second-best option would be for states to agree on a co-ordinated approach instead of setting their own separate renewable energy targets.
