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Pumped hydro plan for SA power security

When the sun doesn't shine and the wind doesn't blow, seawater could keep South Australia powering on.

One of the nation's biggest electricity industry players is looking at building a pumped-hydro generator in South Australia's Spencer Gulf, near industry hotspots Whyalla, Port Augusta and Port Pirie.

The federal government has offered Energy Australia $450,000 in taxpayer funds to help with a feasibility study and hinted there could be more financing available if the project is viable.

But, if it goes ahead, the project won't be ready until the summer of 2020 at the earliest.

Meanwhile, the South Australian government is poised to announce a major intervention in the electricity sector to bring relief sooner.

Energy Australia managing director Catherine Tanna said finding a storage solution was especially important in South Australia.

"What we are looking for are ideas to fix the challenge that when the wind doesn't blow or the sun doesn't shine, you need to have something that's complementary as you shift to this renewable energy future," she told AAP.

"Pumped storage can provide reliable energy that can be turned on very quickly when it's needed."

Ms Tanna briefed Prime Minster Malcolm Turnbull and members of cabinet's energy committee about the plans on Tuesday morning.

The project would use seawater - the second pumped-hydro facility in the world to do so - and produce 100-200 megawatts of electricity, or the equivalent of installing 60,000 home battery storage systems.

She told the cabinet committee if that capacity had been available now, the recent blackouts in South Australia could have been avoided.

"Almost all of the world's stored electricity is stored in pumped hydro but there isn't very much of it here in Australia so this is a very exciting opportunity," Mr Turnbull said at the meeting.

He has made pumped-hydro storage a priority for the Australian Renewable Energy Agency - which is giving the study grant - and the Clean Energy Finance Cooperation.

Ms Tanna was pleased with the reception.

"We had a very good conversations and I'm sure we'll be going back once we have more detailed information after the feasibility study is complete," she told AAP.

But SA Energy Minister Tom Koutsantonis pointed out Tuesday's announcement was just for the study, with no guarantee of help for the state's electricity woes.

"South Australia needs solutions that will bring down power costs in the short and medium terms," he told AAP.

He would like to see the federal government taking the advice of the chief scientist and CSIRO to establish an emissions intensity scheme.

"But the federal government has refused to do this, so the state government will announce a dramatic intervention into the electricity market in the coming weeks that is designed to bring down power prices and improve grid stability," he said.

Pumped-hydro schemes, which have been used with fresh water for decades around the world, have two water reservoirs at different heights joined by a pipe.

When power prices spike, water is released from the upper reservoir to flow through turbines and make electricity, getting up to full capacity within a minute, unlike the hours it takes thermal generators.

When costs fall again, the water can be pumped back up.