The installation of a new gas-fired generator and the establishment of a solar thermal power plant are the most likely short-term solutions to electricity shortages in South Australia, the director of the Australian Industrial Transformation Institute has said.

Professor John Spoehr, who heads the Adelaide-based institution, described the current acrimonious politics debate around energy policy as "a new low in Australian politics" that is damaging for the South Australian economy.

Recently, about 90,000 properties were left without power during a recent heatwave due to the Australian Energy Market Operator (AEMO) ordering load shedding after demand outstripped supply.

Last September, the state was plunged into darkness after wild storms.

"It dents confidence, so it's very important that policymakers move very quickly to restore confidence," Professor Spoehr said.

Government tipped to encourage investment in renewables

The South Australian Government has promised a "dramatic intervention" in the electricity market, to be announced within weeks, to improve power security and to avoid more power cuts.

Professor Spoehr said he believed the State Government would use its purchasing power to back a new gas-fired generator but would also encourage investment in base load renewable energy.

"There's one outstanding project on the drawing board, and that is the solar thermal plant in the north of the state ... it would be a good time to get behind that because it offers the prospect of developing a new industry and that will generate jobs," he said.

While South Australians wait to hear what form the State Government intervention will take, Professor Spoehr said the electricity shortages would spread to other states unless the Federal Government acknowledged that it was a national problem and worked with the states to introduce major reform of the national electricity system and energy market rules.

Professor Spoehr said South Australia was "the canary in the coalmine", with the planned closure of Victoria's coal-fired Hazelwood power station next month expected to exacerbate energy supplies in that state.

The latest edition of the Griffith Review, titled State of Hope, which examines the future of South Australia, will be launched at the State Library tonight.

Professor Spoehr said there was "lots to be hopeful about".

In the publication he described the state as facing a period of big challenges and opportunities, including the shut-down of the Holden manufacturing plant in north Adelaide in October.

To tackle these challenges, Professor Spoehr said, the State and Federal governments needed to agree on more investment in major infrastructure projects and accelerate the diversification of the state economy through a "much more aggressive strategy" in cooperation with the private sector.