The Energy Security Board has issued a draft design outlining a light touch approach to the National Energy Guarantee that will make it easier for small retailers to challenge the market power of energy giants such as AGL Energy, EnergyAustralia and Origin Energy.

The draft NEG design distributed ahead of next Friday's COAG energy ministers' meeting won't require electricity contracts to specify physical sources of generation or privilege coal generation over other forms of on-demand supply that can "firm" up intermittent wind and solar energy.