The consumer watchdog has handed down a damning report into the energy system, making 56 recommendations on how to deal with rising power prices.

Among them, a proposal for the government to effectively bankroll new dispatchable generation.

The report found a lack of competition and price gouging by retailers are driving up electricity costs.

The Australian Competition and Consumer Commission (ACCC) say power bills could be slashed by a quarter if the recommendations are accepted.

Chairman Rod Sims tells Chris Kenny “many things have gone wrong”.

“We have had excessive subsidies for some of the renewable energy.

“We have had a much too concentrated generation sector and we have had retailers confusing consumers with discounts off very different baseloads, so the consumers don’t know how to go about buying what should really be a very simple and essential product.”

Mr Sims says he is “hopeful” government will implement the recommendations.

“We think we’ve put together a really compelling set of recommendations that will save consumers a lot of money and we think we’ve argued our case pretty well.”

Click PLAY below to hear the full interview