Government will meet with the states and territories on Friday for the National Energy Guarantee (NEG) showdown.

The New South Wales Cabinet has officially endorsed the NEG while the policy is facing opposition from Labor states, who want the current 26 per cent emissions target increased.

Coalition’s backbench committee on climate and energy chairman Craig Kelly tells Ross Greenwood he has “a couple of concerns”.

“Firstly, what it actually does is it artificially forces more renewables into the grid.

“We’ve seen examples everywhere overseas and even here in Australia, the more renewables you force into the grid artificially, the higher electricity prices become.

“If you’re taking out your low-cost production and putting in high-cost production, I just don’t for the life of me see how that can actually lower prices.”

Click PLAY below to hear the full interview 

On AGL’s whopping $12.8-billion profit, the member for Hughes says it’s “simply profiteering”.

“What they’ve been able to do is just benefit from the high increasing cost of the wholesale price on electricity.”