Treasurer Scott Morrison says energy from a new coal-fired power plant would be twice as expensive as current coal power and it's "false" to think otherwise.
The federal cabinet is staring down the latest pro-coal campaign from a group of coalition backbenchers, who have dubbed themselves the "Monash Forum".
Mr Morrison said established coal plants sell power at $30 a megawatt hour, but a new coal plant would likely sell at $70 or $80.
"It is false to think that a new coal-fired power station will generate electricity at the same price as old coal-fired power stations for the obvious reason that the asset has already been written off," Mr Morrison told a banking summit on Wednesday.
The coalition backbenchers want taxpayers to fund a $4 billion new coal plant, but Mr Morrison torpedoed the plan.
"The days of subsidies in energy are over, whether it is for coal, wind, solar, any of them," he said.
Former deputy prime minister Barnaby Joyce revealed he signed a Monash Forum letter because he wants to make "absolutely certain" that the government's national energy guarantee delivers coal-fired power stations.
"I was aware of it and I signed it; it would have been remarkable if I hadn't," he told The Australian on Wednesday.
"HELE (high-efficiency, low-emissions) coal-fired power plants are not the Dickensian dark satanic mills of many a year ago."
But Mr Morrison says new coal plants will not be cheaper than current coal power.
"You don't just open up one down the road and all of a sudden it is producing power at the same price as Bayswater or any of the others," he said.
"That is just not an economic fact."
Resources Minister Matt Canavan, a strong advocate for coal power, said coal plants don't need government subsidies.
'"It competes on its own two feet and if we just allow the market to work, and that's what the government wants to do, and end a lot of the subsidisation of other types of energy, coal-fired power will work," he told Sky News.
"Let business get on with the job of producing cheap power."
Energy ministers will meet in Melbourne on April 20 to discuss the national energy guarantee.