Solar thermal plant proposed for Port Augusta in SA

South Australia can lead the nation in renewable energy with a proposed solar thermal power station, Premier Jay Weatherill says.

Sydney-based Solastor, chaired by former Liberal leader John Hewson, today unveiled plans to build the $1.2 billion plant in Port Augusta.

Solastor is yet to secure funding but has in principle backing from the state and federal governments, with the announcement attended by federal Environment Minister Greg Hunt and Labor spokesman Mark Butler.

Dr Hewson says the plant would be able to store a week's worth of energy, making it more efficient and cost-effective than existing, renewable energy projects which can only supply intermittent power to the grid.

It would power more than 200,000 homes, helping to fill the gap left when the last of Alinta Energy's coal-fired power stations in Port Augusta shut down last month.

"We have no doubt it's the most efficient technology in the world and the cheapest," Dr Hewson told reporters.

"We're not wanting to raise expectations falsely because we still haven't finalised the land, the finance (or) the approvals process but we've started them all.

"We have no doubt it can be done, otherwise we wouldn't have announced it."

Dr Hewson said Solastor had not factored any grants into its "conservative" business case.

But the company would seek assistance through the Clean Energy Finance Corporation, with other funds likely to come from a consortium of banks.

Mr Weatherill said there would likely be room for more than one solar plant in the state's clean energy mix.

"We've got one of the dirtiest energy systems in the world. Everyone knows it has to be cleaned up," he said.

"South Australia's acting first and we'll get the benefits from being the first to move."

Solastor aims to built a one megawatt demonstration plant by the end of the year and connect it to Port Augusta's existing grid.

The company said the solar thermal project would create 600 construction jobs and more than 100 permanent jobs.