The Morrison government has copped a blast for calling for expressions of interest in new power generation projects before it is clear that any enabling legislation can clear the parliament before the next federal election.

The Australia Institute has used a submission to a government consultation process to criticise the government for “building the process while running it” – pointing out the Coalition is calling on interested parties to pitch projects before the parliament has set up the necessary policy framework – a procedure “which poses a number of risks”.

The energy minister, Angus Taylor, has suggested the government may underwrite investment in new power generation and indemnify coal projects against the future risk of a carbon price.

Labor has signalled it would not support either form of taxpayer intervention. The opposition has also been sharply critical of other elements of the government’s latest energy foray, which indicates the Coalition is unlikely to land a bipartisan consensus on a package which has already triggered a strong backlash from stakeholders.

If Labor remains opposed, the government will need to court crossbench votes. Rex Patrick from the Centre Alliance told Guardian Australia he was unlikely to support a proposal advanced just before a federal election in the absence of bipartisan consensus.

Patrick said the government needed to develop its plan carefully and not rush to implementation. He characterised Taylor’s current approach as “cart before the horse in circumstances where neither the cart nor the horse has been decided”.

Government officials told representatives of the Australia Institute last week that the proposed underwriting program would require legislation, and indicated the earliest it could be ready was the autumn sitting period, which is early in 2019, right before an election.

Taylor has embarked on a supercharged process, with proponents asked to bring forward potential investments for government assessment in December and January, even though it is unclear whether the objectives can be delivered.

Speculation is rife around the energy sector that the government proposal will ultimately centre on an extension of the Vales Point power station near Lake Macquarie in NSW. It is owned by Trevor St Baker, who was vocal during a recent stakeholder session convened to discuss the underwriting program.

The Australia Institute submission says the government’s proposal to underwrite new generation is “highly problematic and exposes taxpayers to considerable financial risk”, with the risks heightened by the very short timeframe for project consideration.

“The reality is that the electricity sector is going through a transition period and this heightens the uncertainty in the sector and increases the chances that the government could end up exposing taxpayers to an unviable and very expensive failure.

“This is further enhanced if the government chooses to ignore wider issues facing the sector like future action on climate change,” the submission says.

The government’s latest energy policy foray has two elements – price regulation and the proposed underwriting of new generation.

Australia’s major electricity companies have raised questions about whether the Morrison government has the legal authority to proceed with its so-called “big stick” threat to break up companies for price gouging, and to impose the regulation of power prices.

The energy retailer AGL says the government’s new remedies to reduce power prices are “disproportionate, lack procedural fairness and will deter investment”.

It opposes divestiture powers “in the strongest possible terms” because handing the government interventionist remedies “will distort the proper functioning of the market, particularly given the apparent lack of procedural fairness afforded in the process”.

The Clean Energy Council, an organisation that represents renewable energy companies, energy efficiency companies and more than 5,600 solar installers, has blasted the underwriting program as “a high-risk strategy that creates a market distortion that could have the opposite outcome to the one intended”.