The South Australian and NSW governments have signed an agreement to establish an electricity interconnector between the two states.
The memorandum of understanding sets out a framework for co-operation on the project and commits both governments to the development process.
"An interconnector between South Australia and New South Wales is a nation-building project that will allow both states to export their excess energy to one another to help bring down prices and improve the security of our systems," SA Energy Minister Dan van Holst Pellekaan said.
Developing the interconnector was an election commitment by the South Australian Liberal government.
It has already committed to an early start to route selection, environmental studies and engagements with landowners.
Recent reports from Electranet and the Australian Energy Market Operator have indicated the interconnector could cut annual bills in SA by about $30.
NSW Energy Minister Don Harwin said the project would be good for both states.
"The project will improve NSW energy security and management of peak demand events by unlocking an additional 750 megawatts of low-cost energy which can be accessed at any time of the day or night," he said.
