Pumped hydro sites in Tasmania that could store as much energy as 300 Tesla big batteries will get finance underwritten from federal taxpayers.
Prime Minister Scott Morrison will on Wednesday announce the coalition government will financially support the new developments, as long as they stack up economically.
Tasmania will spent $30 million on feasibility studies to investigate three pumped hydro storage sites in Tasmania as part of the Battery of the Nation project.
"Battery of the Nation is a vision of that uses technology to harness Tasmania's natural advantages to tackle the problems in our electricity market," Mr Morrison said ahead of his visit.
"It's technology that generates clean and affordable power that will make Australia's electricity supply more reliable.
"This project is about helping those families and businesses who have had to cope with devastating blackouts in recent months and years and helping make their power bills cheaper."
The three sites in northwestern Tasmania have a combined storage capacity of up to 40GWh, equivalent to more than 300 of the Tesla batteries installed in South Australia.
Pumped hydro uses cheap electricity - usually at night - to pump water up a hill and into a dam, where it is stored. When energy demands start to peak during the day, the water can be released downhill through turbines to generate power.
The announcement comes two days after Mr Morrison promised $56 million to fast track development of a second interconnector between Tasmania and Victoria.
When built, the Marinus Link will be another option along with Basslink to send power from Tasmania to meet peaks in mainland demand.
"These initiatives will cement our status as the nation's renewable energy powerhouse," Tasmanian Premier Will Hodgman said.
About 400MW of available dispatchable generation cannot currently be delivered to the mainland, due to constraints on Basslink, which is more than 15 years old.
On Tuesday Mr Morrison announced $1.38 billion to support a pumped hydro project on the Snowy Hydro scheme in NSW.
Labor's energy spokesman Mark Butler on Tuesday said the Marinus Link and Snowy 2.0 needed more wind and solar power to help them stack up economically.
He said Labor's higher renewable energy target was the best way to make these major projects viable.
