The company behind a $100-million solar plant with battery storage says its project could solve South Australia's energy woes as the Federal Government announces a $445,000 investment into a pumped hydro-station for the state.

South Australia's power supply has been scrutinised since the state was plunged into darkness last September, and was forced to "load shed" during a recent heatwave.

South Australian-based renewable energy company Zen Energy is working to build a $100-million solar power plant with 100 megawatts of battery storage in the region.

Chairman Professor Ross Garnaut said the battery would "solve most" of the state's energy problems and if increased by a further 50MW it would solve "all" energy issues.

"The blackouts of the past year would not have happened if this was in place," he said.

"The load shedding problems of two weeks ago would be resolved, the frequency and voltage problems of last September would be resolved, the frequency control issues that have arisen a few times would have been resolved.

"We think that it can make a major contribution both to grid stability and also to provide a buffer for when peak demand for power exceeds supply from other sources."

National electricity market needs reform: Garnaut

But Professor Garnaut said "arcane" rules and pricing in the national electricity market needed to be reformed in order for the project to be viable.

Ross Garnaut has met with SA's Premier to discuss rules and pricing in the national electricity market. ( Sarina Locke: ABC Rural )

He met with South Australian Premier Jay Weatherill today to discuss the regulatory hurdles which he hoped could be removed by the Council of Australian Governments (COAG).

He said they already had financial backing for the project which meant it could be in operation by next summer if restrictions were loosened.

"Our biggest hope is for reform of the arcane rules of the national electricity market which are standing in the way of a secure energy future; it's one of the most regulated sectors in the Australian economy," Professor Garnaut said.

"All electricity generators and users bid every five minutes for the price but then they average the price over half an hour.

"It makes life very difficult for a battery that can respond very quickly and it takes away some of the advantages of the battery."

Hydro power station for SA's Upper Spencer Gulf

Energy Australia also received $450,000 from the Australian Renewable Energy Agency (ARENA) on Tuesday to develop a pumped hydro-power station in the Upper Spencer Gulf.

Pumped hydro generates power by releasing water from a dam through turbines to a lower dam when there is high demand and pumping it back to the top at off-peak times.

The Federal Government said the project would store power and help stabilise the grid.

Mr Weatherill has previously touted the idea of breaking away from the national electricity market.

But Professor Garnaut said reforming the national system would be a better option for South Australia.

Mr Weatherill said work was progressing on the State Government's energy plan which would recommit to a 50 per cent renewable energy target.

"We've got people beating down our doors promoting renewable energy projects which includes storage," he said.

"The long-term future is renewable energy associated with storage which will secure the future of our energy sector here in this stage and also the nation."

Mr Weatherill said the Government would release its energy plan "soon" but the Opposition has accused the Government of not having a plan.