A mix of coal power plants, pumped hydro and gas-fired power have been presented to the federal government as options for its program to underwrite new electricity generation.

But an ambitious $6bn plan by power baron Trevor St Baker for two new coal power plants has been criticised by the Victorian energy and environment minister, Lily D’Ambrosio, who said the bid proved the scheme was designed to boost fossil fuels.

A spokesman for the energy minister, Angus Taylor, said the government had received “strong interest” for the program, after expressions of interest closed on Wednesday.

Industry stakeholders have criticised the short timeframe for the program, and the Australian Industry Group has warned it could leave taxpayers exposed to liabilities “with a net present value of billions of dollars” because the government could indemnify projects against the costs of new climate change policies.

At least one company that lodged an expression of interest complained to Guardian Australia that the government has not explained who will decide which projects get support, how the government will fund it, whether legislation will be required, and what form of support is on offer, such as loans, grants or contracts-for-difference.

Alinta submitted a proposal for a gas-fired power plant at Reeves Plains in South Australia, a pumped hydro project in New South Wales and a “marginal improvement” to its Loy Yang B coal power plant in Victoria.

On Saturday the Australian reported that St Baker had developed a $6bn proposal backed by a Chinese joint venture to develop Australia’s first high-efficiency, low-emissions coal plants in Victoria and New South Wales.

The proposal would see a 1300 MW coal plant built at the site of the shuttered Hazelwood station in Victoria, a $500m pumped hydro facility in South Australia and a coal plant in NSW either at AGL’s Liddell coal plant, which is scheduled to shut down in 2022, or at the site of the old Vales Point A power station.

“Our plan is the cheapest way to supply the essential firm generation you need for reliable power,” St Baker reportedly said.

D’Ambrosio told Guardian Australia: “The Morrison Liberal government is obsessed with backing new coal plants that would cost Victorians more and this proposal is no different.”

Guardian Australia understands the Victorian government has not received any approach or proposal from St Baker, despite the fact the plan would require planning approvals to develop the Hazelwood site.

Energy Australia also submitted a proposal but its energy executive Mark Collette told Guardian Australia that investment confidence is the “not so secret spice” that is still needed to guarantee its new generation projects.

“National energy policy incorporating affordability, reliability and emissions is the best way to deliver investor confidence,” he said.

“We have long argued where there’s confidence, the sector is willing to take risks and invest, helping to form a new, modern and cleaner energy system.”

Collette urged the government to “proceed carefully” with the underwriting scheme to “make sure there are no unintended consequences affecting investment, and of course, our customers”.

Federal Labor has warned it does not support the government indemnifying new coal plants against the future risk of a carbon price.

Labor’s climate spokesman, Mark Butler, said “industry, investors and the experts have all been clear – there is no appetite for investing in new coal-fired power stations”.

New coal power plants “would provide relatively high levels of pollution, particularly if it is using brown coal from Victoria”.

“It would be completely inconsistent with our climate change commitments and it would require billions and billions of support from taxpayers.”

D’Ambrosio said Victorians had overwhelmingly backed Labor’s commitment to increase Victoria’s renewable energy target to 50% by 2030.

“Setting an ambitious renewable energy target will boost jobs and investment across regional Victoria, as well as drive down power prices for Victorian businesses and families,” she said.

Taylor’s spokesman said the government “will carefully consider all proposals - some of which have already been reported in the media”.

“We’ll have more to say once we have considered all the submissions and feedback received during this process.”