New coal a backup for renewables: Canavan

He also says new coal-fired power generation would make sure jobs aren't lost overseas.

The Australian Competition and Consumer Commission has called for the government to underwrite new power plants for businesses who can't get finance.

Senator Canavan says that should include coal.

"I'm not willing to put all our eggs in the basket of, potentially, improvements in batteries or renewables," Senator Canavan told the ABC on Sunday.

"That might happen, but that approach would effectively be like going to the casino, and saying 'let's put it all on black and see how we go.'

"Because if it doesn't work, we've got thousands of people that will lose their jobs."

Prime Minister Malcolm Turnbull has ruled out directly funding any particular type of power, but says the idea of taxpayers underwriting new generation has some merit.

The coalition is trying to get the states and Labor to agree to its national energy guarantee policy, but it could fall over if coal is subsidised.

Senator Canavan said he understood the political ramifications.

"I'm not, and my Nationals colleagues are not mandating that coal should be definitely invested in," Senator Canavan said.

"But what we are doing is reflecting the common sense of the ACCC that all fuel types should be considered.

"We've got to all come together and be flexible."

The ACCC's report into the energy market made 56 recommendations, which it said could cut 25 per cent off household and business power bills.

It identified how government policy indecision allowed generators and retailers to rip off billions of dollars from Australians.

Mr Turnbull is considering the recommendations but is largely supportive of the measures aimed at bringing prices down.

Labor is also considering the recommendations but is pushing back against new coal investment.

Australian Associated Press