Over the past decade, more than 97 per cent of outages were due to problems with the poles and wires that transport power to homes and businesses, the Grattan Institute report has found.

Such outages therefore had nothing to do with how the energy was generated.

A lack of generation capacity on hot days caused 0.1 per cent of outages over the past decade.

Power can also go out across the grid because of equipment failures, falling trees, inquisitive animals and crashing cars, the report says.

IT also found that, over the past decade, network costs were the largest cause of increasing residential electricity prices in NSW and Queensland - echoing findings from other inquiries including by the competition watchdog.

This was driven by more than $16 billion being injected to boost network reliability standards in the wake of blackouts in 2004.

The report has highlighted the importance of energy policy to encourage investment, as the National Energy Market is in a phase of rapid change.

Australia's energy mix will change due to the impending closure of coal-fired power stations, which are reaching the end of their technical lives.

This is creating a tight balance between supply and demand, which is only likely to become worse when Liddell power station in NSW closes in 2022.

Grattan Institute's energy program director Tony Wood says a "cool-headed policy response" is needed to manage reliability, rather than panic and politicking.

"Increased renewable generation does create challenges for managing the power system," he said.

"But if we keep calm and carry on, these challenges can be met without more big price increases for households and businesses."

The report's authors are calling for a stable market platform that deals with emissions, urging the COAG energy council to implement a stable and clear policy on reduction targets.

The government should also progress with its retailer reliability obligation, they say.

Meanwhile, $9.6 million has been awarded to renewable energy projects, including a program to help the NSW electricity grid control energy sent to the system from household solar or batteries.

Projections show up to half our electricity could be generated by consumers within the next few decades, up from four per cent today, says Australian Renewable Energy Agency chief executive Darren Miller.

"This is a huge change and will require innovations in software, hardware and thinking to achieve the best outcome for consumers."

The latest grant round also includes projects which aim to increase the network's hosting capacity while maximising the ability of solar to provide energy to the grid.

Australian Associated Press