A leading economist has warned a proposed coal-fired power station in North Queensland could leave taxpayers exposed.

The Morrison Government has put up $4 million for a feasibility study into the station proposed for Collinsville, which the government claims can produce reliable and affordable power that will boost back development in the region.

Economist Frank Jotzo, a specialist in climate and energy policy, doubts the commercial viability.

The high cost of building and running the plant and the falling cost of other energy sources mean any such plant will not be viable for the 40-to-50-year life span it needs.

“No-one has built a coal-fired power station in Australia for quite some time,” Mr Jotzo has told the ABC.

“It seems entirely unrealistic that a coal-fired power station would be built in North Queensland, or in fact anywhere.”

He said electricity demand in North Queensland is pretty flat, with significant supplies on standby already.

“The average cost of producing electricity from a new coal-fired power plant, if one were built now, might be as high as two times higher than the average cost from wind and solar plants, even if you factor in the cost of smoothing out the intermittency of those plants with energy storage,” Mr Jotzo said.

The Collinsville coal power project has been proposed by Shine Energy - a Brisbane-based company run by the Indigenous traditional owners of the land.

With an expected cost of $2 billion, Shine Energy says it can create a high-efficiency, low-emissions (HELE) 1-gigawatt coal plant, including a solar component.

An engineering firm has allegedly run a concept study that found the project to be viable, but the company is refusing to release publicly.

Shine Energy has asked the Morrison Government to indemnify it against future carbon price systems or climate policies that would put it at risk.

Mr Jotzo said such a guarantee would expose the taxpayer to huge losses if the power station became unviable.

“The financial risk of any new coal-fired power plant would be massive,” he said.

“Any new coal-fired power plant would need Government support [via] subsidies and a guarantee that a carbon price would never be applied.

“It would need to be the taxpayer that underwrites all of this. And it would be the taxpayer that pays the inflated bills for decades to come.”

But still, the idea has received the strong backing of pro-coal Nationals MPs.

Former resources minister Matt Canavan is a big supporter of the plan.

“We really needed a coal-fired power station in North Queensland yesterday,” Senator Canavan told reporters.

“We didn't start it yesterday, so the best time to start is as soon as possible.

“Let's wait and see what the study says. I'm driven by the facts and figures.”

Keith Pitt, also a Nationals MP from Queensland, recently replaced Senator Canavan as Resources Minister.

Mr Pitt says there is a general need for reliable power in the north.

“We have a very large power station in Gladstone which is due for retirement around 2030,” Mr Pitt said.

“If we want to ensure that we have foundries and we have smelters, and we have all those heavy types of industry, delivering Australian products to the world, then we must have affordable electricity.

“There are a number of ways for that to be delivered, and we need to ensure that we look at all of them if you are truly technology agnostic.”