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A diverse group of South Australian businesses will buy power together to cut costs and ensure the stability of supply.

The six-member group, headed by the South Australian Chamber of Mines and Energy (SACOME) and including companies such as Foodland, Central Irrigation Trust and Hillgrove Resources, has signed an eight-year agreement with renewable energy company Simec Zen Energy.

"This outcome demonstrates what can be achieved when businesses decide as a collective that the status quo is not acceptable," chairman Sanjeev Gupta said.

Mr Gupta said one of the keys to fixing the state's power problems, including high prices, was more competition in wholesale generation and retailing.

"This capacity will be a mix of generation assets suited to the new energy landscape, such as the Cultana Solar Power Station and our other projects in the Upper Spencer Gulf," he said.

SACOME chief executive Rebecca Knol said electricity costs accounted for 40 per cent of overhead costs for its members.

"This cross-sectoral collaboration has delivered affordable power to some of South Australia's largest energy users and underpinned the development of new supply for the collective benefit of the state," Mr Knol said.

Mr Gupta, the owner of steelmaker Whyalla steelworks, bought renewable energy company Zen Energy last year.


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