All existing electricity generators – including coal and gas – should be paid to be on standby to avoid blackouts and bolster the stability of the east coast power grid, the Energy Security Board (ESB) says in its response to the energy crisis.

But a national agreement is showing signs of fracturing, and states, including Victoria, are refusing to include fossil fuels in the standby market known as the “capacity mechanism” before a crisis meeting of state and federal energy leaders later this week.