A NEW report argues that building a high efficiency, low emission coal-fired power station would drive down power bills in North Queensland.
A report commissioned by the Minerals Council of Australia says a HELE coal-fired plant would cost less to build than what taxpayers spend on subsidies for renewables.
A new plant, using ultra super-critical black coal, would cost $2.2 billion to build, with subsidies to the renewables sector costing $3 billion a year.
Electricity would cost between $40 and $78 per MWh, less than half the price of solar, which costs between $90 and $171 per MWh.
MCA executive director Greg Evans said North Queensland needed low cost, reliable electricity if it was to develop further.
"A new HELE coal plant can supply this," he said. "There is no reason why a new high efficiency, low emission coal generator could not be located in North Queensland."
The report also revealed variable renewable energy sources could not deliver system strength, inertia, and voltage control essential for a stable grid.
Mr Evans said the introduction of low-cost coal generation would place downward pressure on electricity prices.
"Queensland is lucky to have a more modern coal fleet than other states but that should not rule out the construction of a new HELE coal plant," he said.
"The reality is as that old coal generators retire, we need to replace that baseload with synchronous supply and with gas prices likely to remain high, only coal will be a low cost option.
"Australia has abundant supplies of high quality coal.
"And because coal-fired electricity generation is a reliable, 24-7 source of power, there is no need for expensive back-up power sources."
Burdekin MP Dale Last said a new coal-fired plant would deliver cheaper and more reliable power if it was built in North Queensland.
"Our residents, manufacturers and businesses are crying out for cheaper power," he said. "It is the single biggest issue in terms of costs."
The Opposition last month announced that, if elected, it would grant "priority project" status to a low-emission coal-fired power plant in the North.
"We are already fielding interest from both within Australia and internationally to construct a coal-fired power station," Mr Last said.
"I favour the site at Collinsville, it ticks all the boxes.
"We have a site there, it's right beside the high-powered transmission lines and right beside a coal mine.
"We have a community that are more than willing to have that built there."
Townsville Enterprise policy and investment director Michael McMillan said the State Government could still meet its 50 per cent renewables target with a coal plant.
"What we need is large-scale baseload and renewables can contribute to that but the only baseload at the moment is large-scale hydro," he said.
"It's not just about competitive pricing, we need low pricing. The only way we're going to get that as technology stands is to look at clean coal and large-scale baseload renewables."
Energy, Biofuels and Water Supply Minister Mark Bailey said MCA's "biased report" was based on self interest.
"The selective data in the report underestimates the cost of new coal generation and over-estimates the current cost of renewables, with solar and wind being delivered at much lower prices today," he said.
"By way of contrast, independent Chief Scientist and head of the National Electricity Market Review Dr Alan Finkel told Senate Estimates recently that it is now a lot more expensive to build new coal-fired power stations than renewable energy infrastructure.
"Any suggestion that Queensland lacks or will lack system strength, inertia or voltage control is ignorant nonsense."