Dipping into the public purse for a coal-fired power station upgrade has been labelled as outrageous and unconscionable by environmental groups.
The federal budget has confirmed $134.7 million over four years for dispatchable generation and reliable energy across Australia's electricity grids.
That includes an upgrade to Delta Electricity's Vales Point coal-fired power station.
The upgrade had included improving turbine blades and other equipment to produce the same amount of power with lower emissions.
Tuesday's budget also locked in $52.9 million to support the Morrison government's gas expansion plan, including developing plans to unlock five gas basins.
Shadow treasurer Jim Chalmers has criticised the budget for not doing anything meaningful for cleaner and cheaper energy.
The Australian Conservation Foundation says gas is the clear winner in the budget, while climate action has lost out.
"We know the best way to cut the pollution driving global warming is to move away from burning coal and gas, yet this budget provides funding that locks in new fossil fuel projects," the organisation's chief Kelly O'Shanassy said.
"It is outrageous that public money is allocated towards upgrading the Vales Point coal-fired power station on the NSW central coast."
Greenpeace Australia's Kate Smolski says clean energy projects should be central to the budget.
"Ageing coal-burning power stations like Vales Point should not be allowed to continue to pump out toxic air pollution that damages human health and exacerbates the climate crisis," she said.
"It is unconscionable that in a pandemic the Morrison government is using public money to help ageing and unreliable coal-burning power stations like Vales Point make more people sick."
Another energy-related measure in the budget is $5 million to cover both an electric vehicle manufacturing facility in SA, and a vehicle-to-grid trial in the state.
Energy Minister Angus Taylor claims the budget will lower energy prices and create more than 135,000 jobs.
"While developing the backbone of a reliable, lower emissions electricity market for the next decade and beyond," he added.
The petroleum industry's peak body welcomed the funding confirmation for the gas expansion, saying it affirmed the role of oil and gas for energy security.
