Liberals and Nationals have rejected a push from colleagues for the federal government to invest in a coal-fired power station.
The Morrison government is considering a list of 66 power project proposals for underwriting, a number of which are understood to involve coal.
Former Nationals leader Barnaby Joyce, who holds a NSW seat, and six Nationals MPs have demanded the Commonwealth fund a coal project in Queensland.
They say it is the best way to reduce power prices and improve reliability.
NSW Deputy Premier John Barilaro said he did not believe any government would "subsidise coal going forward".
"The truth is the market will not support another coal-fired power station - there is no real interest, the finances won't be there," he told Sky News on Tuesday.
Mr Barilaro said the energy market needed certainty, which the now-dumped national energy guarantee policy would have delivered.
Asked whether he would work with a federal Labor government, which would introduce the NEG, he said: "We'll work with anybody in relation to an NEG, a framework which gives certainty for investment."
Federal Liberal MP Tim Wilson, who holds the blue-ribbon Melbourne seat of Goldstein, said if coal projects stacked up financially the private sector would build them.
"I'm not a fan of the government getting involved and building a new coal-fired power station," he told ABC radio on Tuesday.
"I don't believe that's coalition policy or ever has been."
Victorian Nationals leader Peter Walsh expressed similar views.
"I don't believe that the government should invest in a coal power plant," Mr Walsh told ABC radio.
"If private enterprise doesn't believe it's attractive to invest, why should the government do it?"
Federal Labor has already ruled out spending taxpayer money on new coal-fired power stations.
Opposition Leader Bill Shorten seized on the damaging coalition divide during a press conference in Canberra.
"Can the Liberal Party and the National Party of Australia please tell us what's going on?"
