Coal is not a "promising future to bet your cards on", the head of the World Energy Council says.
Christoph Frei says demand for coal is decreasing in the UK, the US and in China for differing reasons, such as concerns over pollution.
"China today is absolutely clear about the pollution issue being a massive health problem - in air, water, soil, food," Dr Frei told AAP in Canberra on Wednesday.
"They're working very hard to get this local pollution issue sorted and ultimately that means getting out of coal."
In the past six years the amount of coal being used in the UK's electricity mix had dropped from 40 per cent to six per cent, while gas was becoming cheaper in the US, he added.
"For different reasons in those places, we see coal has peaked. The coal demand globally has peaked," he said.
"It's only going to go down from now. Yes it will take time, but it's not a promising future to bet your cards on."
Prime Minister Scott Morrison says the government will back investment for "more new reliable power generation", with a pipeline of energy projects to start next year.
Mr Morrison has said that where coal "stacks up" it could be included in the project list and emissions cuts would not be forgotten in the plan.
The government has kicked into gear further mechanisms of its plan to lower electricity prices, this week announcing work would begin to set a default power price for retailers.
A reference bill will also be established so consumers can check their discounts against a common reference point.
Independent senator Tim Storer is "alarmed" the federal government's energy policy does not focus on helping to reduce carbon emissions.
The South Australian senator says he is "sympathetic" to the proposal to underwrite new generation, but fears it will force tax payers to fund new coal-fired power plants.
"I am opposed to the proposal to give the treasurer the power to order divestment of assets," he said in a statement on Wednesday.
"It is simply a device to force the sale of dirty, old power stations rather than encourage transition to cleaner, cheaper and more reliable energy production."
The Australian Energy Council says a default power price won't lower power bills for most consumers, as the majority of users have switched to market offers.
Energy Minister Angus Taylor will meet with his state and territory counterparts in Sydney on Friday to discuss implementing the default market price and reference bill.
Australian Associated Press
