The energy minister, Angus Taylor, has signalled to restive Queensland Nationals that taxpayer backing for a dispatchable energy project is on the way as one of the rebel MPs has warned a decision is necessary before the election.

With cabinet set to consider energy among a range of issues on Tuesday, with the budget looming and the federal election now only weeks way, Taylor told journalists it was “critically important” that Queensland see more competition in power generation, and more dispatchable supply.

“We want to see more dispatchable supply and competition in the marketplace,” Taylor said on Monday. “It is critically important that it happens in Queensland.”

Six Queensland Nationals have demanded their leader, Michael McCormack, and Taylor take “immediate action” to underwrite new power station construction in regional Queensland – a concerted push launched at the beginning of March that fractured the government, because Liberals believe a taxpayer-backed coal commitment would derail their chances in the coming contest.

The Nationals desisted from public campaigning in the lead up to the state election in New South Wales last weekend, but with some state Nationals thumped in Saturday’s contest, and with their own federal reckoning looming, government MPs are now pressing senior figures for a commitment on an energy project in Queensland.

The former Nationals leader Barnaby Joyce warned on Saturday night as the NSW results came in that his party would pursue more aggressive product differentiation, sending a “different message in regional areas” from the Liberal party.

If the Nationals failed to differentiate, the party would risk another round of punishment in the federal contest, Joyce said. “The Liberal party, as we go into this federal election, has to understand there are different constituencies, and we have to stand up for ours, or what was reflected at a state election will be reflected at a federal election.”

The Queensland National Keith Pitt, who is one of the group of six, welcomed Taylor’s public signal on Monday, and declared action was necessary in the state “because we have a state monopoly which is driving up people’s power prices”.

Asked whether the government needed to deliver a specific commitment on a new power generation project for the state before the election, Pitt said: “Clearly we have to tell the people supporting us what it is we intend to do for them.”

The Morrison government has developed a program where taxpayers underwrite new power generation. Taylor has confirmed more than 60 proposals are currently before the government for consideration, including around 10 coal projects.

The government has indicated it will give support to the battery of the nation hydro project in Tasmania, but is yet to release a shortlist of other projects it intends to back.

The energy minister has been dead batting questions for months about when the shortlist will be released, and continued to do that on Monday. “We’ll announce it when we are ready,” Taylor said.

The energy minister said more dispatchable power was needed in Queensland to boost competition “because what we’ve got up there is a Queensland government that is gouging – it is taking $1.65bn from the marketplace”.

While many of the Nationals want coal, Morrison has already signalled the government is unlikely to pursue a new coal project in Queensland because the state Labor government won’t approve a new power station.

“For such a project to proceed, it would require the approval of a Queensland state government,” Morrison said in the middle of March. “The Queensland state government has no intention of approving any such projects. At all.”

Morrison said his focus was on “things that actually will happen” and “not in hypothetical debates”.

If the government won’t support new coal for the state, logically, other options include gas or pumped hydro, or firmed renewables.