Deputy Prime Minister Michael McCormack believes the competition watchdog has given the green light for the government to support new coal-fired plants.
The Australian Competition and Consumer Commission has recommended the government give financial certainty to new power plants, but didn't single out any particular technology.
The Nationals leader said the report showed coal was one technology the government should support if it moves to underwrite power generation.
"Coal has to be part of the mix. We've got plenty of it, we're exporting plenty of it, why don't we use more of it for our domestic power needs?" Mr McCormack told Sky News on Friday.
The government insists it is technology neutral and will let the market decide which forms of power generation come into the market.
Mr McCormack said coal created thousands of jobs, while also noting gas and other technologies had to be considered.
The Nationals leader support for coal is at odds with Prime Minister Malcolm Turnbull and other senior cabinet ministers who have been careful not to single out any form of power generation.
Resources Minister Matt Canavan, a Queensland Nationals senator, and coalition backbenchers are continuing to make the case for coal.
Cabinet minister Christopher Pyne says the government can't afford to be ideological.
"The ACCC didn't suggest the subsidy of a coal-fired power station," Mr Pyne told the Nine Network.
The watchdog's report claimed power prices could fall by about 25 per cent if all the recommendations were adopted by federal and state governments.
"That can only happen with the government's policy of not picking winners, but supporting all technological outcomes that put more power into the system," Mr Pyne said.
Finance Minister Mathias Cormann said the focus should be on lowering prices and improving reliability, not getting "too obsessed with the inputs".
However, the government's national energy guarantee would give coal-fired power its best chance to attract investment in years.
Labor frontbencher Anthony Albanese said no one in the business community was interested in new coal-fired power plants.
"This is a fantasy of Tony Abbott and the far right of the Liberal Party," Mr Albanese told the Nine Network.
Meanwhile, an Australia Institute report found rooftop solar had delayed and reduced peak demand in the past summer.
Just when Australians were turning on air-conditioners, rooftop solar in east coast states reduced peak demand by more than 2000MW - the equivalent of a large coal-fired power plant.
The report suggested incentives for solar panels and batteries would show the government was serious about energy security.
Australian Associated Press