A plan to bolster the security of South Australia's energy market is an extensive, and expensive, strategy which aims to make power supplies more reliable and cheaper in the longer term. But how much can the state's taxpayers expect to fork out in the quest to bring down their household electricity bills?

How much does the plan cost?

Of the plan's total announced cost of $550 million, $360 million will be spent building a new 250-megawatt gas-fired power plant.

The South Australian Government will put $150 million into a renewable technology fund, offering incentives to private companies to build battery storage.

Another $48 million will be on offer to exploration companies in the search for new gas sources.

South Australia's Treasurer and Energy Minister Tom Koutsantonis said he had built up healthy budget surpluses which would now pay for the bold energy plan.

But peak business organisation Business SA, the Liberal Opposition and the welfare sector's South Australian Council of Social Service (SACOSS) expressed concerns about the cost of the plan, particularly about how much would be spent building a new power station.

"We hope that the market … delivers real price decreases for South Australians," Ross Womersley of SACOSS said.

"We don't know what the quantum of those price decreases will be, but we would certainly be hopeful that that was one of the outcomes."

Will electricity become cheaper for households?

Since 2008 South Australian household electricity bills have risen about 60 per cent.

The economist who helped design the power plan said it would help bring down prices — despite using expensive gas generators rather than cheaper Victorian coal.

Melbourne-based Danny Price from Frontier Economics designed a carbon price in the electricity sector for then opposition leader Malcolm Turnbull and SA Senator Nick Xenophon in 2009.

He was engaged last year by the SA Government to model its plan, which includes an Energy Security Target which works in a similar way as a carbon price to preference gas over coal.

Mr Price said the scheme would work to reduce prices by generating competition and new investment.

"Insecurity leads to higher prices and obviously lack of competition leads to higher prices — if we reverse those trends prices will fall," he said.

"At the moment contract prices include a very risk premium and that risk premium comes from the insecurity that exists inside the state.

"If you address the problem of insecurity in South Australia by making better use of the generators we have here, and we have thousands of megawatts that just sit idle, that will directly affect security and lower prices in the state, even though it will cost slightly more in fuel."

How quickly will the plan have a market impact?

The SA Government said parts of its energy plan would start happening immediately, but projects such as the new gas-powered plant would take longer.

Josh Frydenberg says SA is challenging the national electricity market structure. ( ABC News: Nick Haggarty )

Federal Energy Minister Josh Frydenberg said he believed prices would go up, not down, and the SA Government's preference for "locally-made" electricity went against the spirit of the national electricity market.

"SA wants to rip up that national agreement and, in doing so, will only drive up prices for its people as well as those in other states," he told reporters.

Will business find electricity supply more reliable or cheaper?

When stormy weather led to a state-wide blackout last September, it cost South Australia's biggest energy user, BHP Billiton's Olympic Dam mine, more than $US100 million.

The mining firm has welcomed the energy plan the Government has outlined, saying it looks forward to "immediate steps being taken which will provide greater energy security for the state before the end of the year".

To be sustainable, globally competitive and able to attract long-term investment in this state, it is critical South Australian businesses, including Olympic Dam, have access to secure and competitively priced electricity," the company said in a statement.

"We look forward to engaging with industry and government stakeholders on the technical details and implementation."

Politically, the Labor Government will be keen to avoid blackouts next summer because it will face the voters a year from now, on March 17, 2018.