Less than a week after securing his party's support for a new energy policy, Malcolm Turnbull's leadership has been challenged.

Here is what you need to know about how we got here.

What's going on right now?

The Prime Minister has beaten Peter Dutton 48-35 in a Liberal party room leadership spill.

Mr Turnbull resigned as leader at the start of the meeting to prompt a vote to test the support of his opponent.

Mr Dutton has now resigned from Cabinet, giving him greater freedom to campaign for the leadership in coming days and weeks.

Mr Turnbull will need to reshuffle his frontbench in order to fill the massive Home Affairs portfolio vacated by Mr Dutton.

What's Turnbull's big problem?

Put simply, he's not popular enough.

The election is set to be held in the middle of next year.

Under Mr Turnbull, the Coalition has trailed Labor in 38 consecutive Newspolls.

In the Longman by-election in July, the Liberal-National candidate secured just 30 per cent of the primary vote. This was down almost 9 percentage points compared to the 2016 election.

If such a swing was replicated at the coming election, the Coalition would face a heavy defeat.

Some are predicting a leadership showdown between Mr Turnbull and Mr Dutton. ( ABC News: Adam Kennedy )

So what's Turnbull's other problem?

His original energy policy, which was trying to deliver cheaper energy, more reliability and lower emissions, enjoyed broad support — even in his party room.

Three quarters of Liberal MPs supported the policy at a meeting last week.

However, those who didn't support it threatened to "cross the floor" — that is, vote against it in Parliament.

The balance in the House of Representatives is so tight that even if only a couple of rogue MPs crossed the floor, it could lead to the Government failing to control the House of Representatives.

Mr Turnbull wanted to avoid that at all costs, so he announced changes to the policy on Monday.

Malcolm Turnbull alongside Scott Morrison and Josh Frydenberg announcing the shift towards energy prices. ( ABC News: Matt Roberts )

Who's behind the opposition?

Former prime minister Tony Abbott — the man knocked off in a leadership challenge by Mr Turnbull — has been the most vocal critic of the energy policy.

But there is a group of backbench MPs who have been outspoken about the need to focus energy policy on reducing power prices, including Craig Kelly, Tony Pasin, Eric Abetz and Andrew Gee.

They seem to have got their way, on energy policy at least.

Is it 'really' about energy?

These backbench MPs are generally more conservative in their views than Mr Turnbull.

They consider international emissions targets less important than energy prices, so their opposition to the policy makes sense.

But it's also the case that most of these MPs would be unlikely to support Mr Turnbull in a leadership contest.

Destabilising the prime ministership over this policy could deliver them a leader more closely aligned with their own personal views.

Why is everyone talking about Peter Dutton?

Mr Dutton is a senior conservative voice in the Government.

A former police officer, he has marketed himself as a politician strong on security and maintaining traditional Australian values.

He's also from Queensland — the home of a swathe of marginal seats.

Peter Dutton has control of the vast Home Affairs portfolio which includes migration and federal policing. ( ABC News: Matt Roberts )

If he was to become leader, the Coalition would look very different to voters.

Though Mr Dutton might lose the Coalition votes among moderate Liberal supporters in Victoria and New South Wales, his backers would hope he could win enough seats in Queensland to offset those losses.

Why has this blown up so quickly?

This has escalated because the Government has created urgency around energy security and increasing prices.

It's also an area that emphasises ideological differences within the Liberal Party and has proven volatile for leaders in the past.

Mr Turnbull lost the Liberal leadership in 2009 primarily due to his support for an emissions trading scheme.

At approximately one year out from the next election, we are also at a critical time in the political cycle.

MPs are starting to think about what they can do to give themselves the best chance to keep their seats.

Sorry, this video has expired Christopher Pyne says he supports Malcolm Turnbull's leadership

What does this mean for energy policy?

It will take years to see whether this energy policy — if it gets through Parliament — is effective or not.

But this week has shown decisions have been made, and changed, in response not to the best advice but instead to political pressure.