The South Australian Government will today unveil a plan for "dramatic" intervention in the National Electricity Market, promising to address high energy prices and the insecure power grid by seizing back the state's sovereignty.

Key points: Intervention in the National Electricity Market will only be in state's interest, SA Energy Minister says

Intervention in the National Electricity Market will only be in state's interest, SA Energy Minister says He says plan will incentivise production of natural gas

He says plan will incentivise production of natural gas ARENA suggests pumped-hydro storage used in conjunction with batteries

The plan, which has been under consideration for several months, will be unveiled by the Premier Jay Weatherill and Energy Minister Tom Koutsantonis at 11:00am.

Mr Koutsantonis says the plan will be comprehensive, prompt vast debate and use "every aspect of [the state's] arsenal to address the price and stability issues in the grid".

"It's about more generation here in South Australia for South Australians," he said.

"You're seeing price increases across the country. You're seeing the forward price of electricity spiking in Queensland, NSW, Victoria and South Australia. Fundamentally the market is broken.

"There needs to be national leadership, and in the absence of that national leadership South Australia will act to secure our own interests."

The state's Economic Development Board has recommended the Government consider purchasing the partly mothballed gas-fired power station at Pelican Point, and the Minister has been at pains to keep open the option of renationalising South Australia's privatised electricity grid.

"We can no longer be at the mercy of the market because the market serves its own interest, not ours," Mr Koutsantonis said.

"Australians fundamentally want to retake control of their power assets to suit their own needs because energy is not a commodity to be traded on a marketplace, it's an essential utility. We cannot live without it. And putting it in the hands of shareholders and people who are interested in profit is unacceptable."

However, a complete takeover would likely cost billions of dollars and expose the State Government to sovereign risk.

Pelican Point's owner, Engie, said the station was not for sale. The Australian Energy Market Operator expects Engie to power up the Pelican Point plant once the company closes the Hazelwood coal power plant in Victoria's Latrobe Valley at the end of the month.

Mr Koutsantonis said the plan would incentivise the production of natural gas from South Australian reserves and make the most of the state's abundant reserves of sun and wind energy.

The state currently has about 1700 megawatts (MW) of installed wind capacity, 700 MW of solar and 2900 MW of gas generation.

On a daily basis, this generation is supplanted with up to 600 MW of largely brown-coal power imported from Victoria across the Heywood Interconnector.

The State Government has already committed money to accelerate a business case for building a new interconnector to New South Wales.

It has also pledged $24 million to incentivise local gas producers to make more gas molecules available for local generators.

The Government recently closed two tenders for the supply of its own power needs. Three quarters of the power is required to come from a new generation source. The remaining quarter has been quarantined for dispatchable renewable energy.

Energy storage options including batteries and pumped hydro (PHES) storage are expected to be key components of today's announcement, after the Premier Jay Weatherill spoke with Tesla chief Elon Musk on Saturday.

Pumped hydro, batteries can work in tandem, PM told

The Prime Minister has been briefed on the potential of pumped hydro. ( Supplied: EnergyAustralia )

Australia's Renewable Energy Agency (ARENA) has suggested pumped-hydro storage could be used in conjunction with batteries to cost effectively stabilise high levels of renewable energy in the national grid.

While Mr Musk has joined a host of other companies in proposing batteries as a "quick fix" to instability issues in South Australia, ARENA has been closely examining the technology of pumped-hydro and on Monday provided a briefing note to the Prime Minister Malcolm Turnbull.

The pumped approach uses cheap or surplus energy to pump water uphill to a storage reservoir. The water can then be released downhill to generate electricity on demand when prices are high and output of intermittent forms of energy are low.

"Other than being economically viable now, the most exciting thing about pumped storage, which is long term, is that it is complementary with the shorter-term nature of battery storage," ARENA Chief Executive Ivor Frischknecht said.

Australia has 2.5 gigawatts of installed pumped-hydro generation, with most centred around three projects: Tumut 3 on the Snowy Hydro Scheme, Wivenhoe Dam near Brisbane and the Shoalhaven scheme South of Sydney.

If the nation's existing pumped hydro facilities were operating at full capacity, they would produce enough energy to power 3.3 million homes.

But there has not been any new investment in Australian pumped-hydro projects for 30 years, and ARENA said there was limited potential for further large-scale hydroelectric systems to be installed.

However, the agency said there were potentially hundreds of smaller, environmentally suitable sites for a technology known as short-term, off-river pumped-hydro energy storage, or STORES.

STORES sites are pairs of reservoirs separated by an altitude difference of between 300 and 900 metres in hilly terrain, and joined by a pipe. Water is circulated between the upper and lower reservoirs in a closed system to generate power.

One suitable site with an altitude difference of up to 600 metres has been identified in South Australia in the hill to the east of Spencer Gulf. Other options have also been identified in the Hunter, Illawarra and lower Blue Mountains regions of New South Wales.

"PHES is the only mature, bankable technology that is readily available at scale, however the lead times are long," Mr Frischknecht said

"Most PHES projects take between four to seven years to develop and construct with the majority of cost associated with civil engineering and construction."

However, ARENA said the long capital life of pumped hydro projects made them cost competitive with other more short-term forms of storage, including batteries.

"ARENA's involvement in pumped storage will be to accelerate its transition into the market by helping to identify business models and overcome any transitional issues."