The federal and NSW governments have announced plans to bring forward an upgrade to the NSW interconnector with Queensland.

The $102 million project will improve the technology connecting the nation's east coast power grids, adding an extra 190 megawatts of capacity during peak demand periods.

The first stage of TransGrid's upgrades to the transmission link between Queensland and New South Wales will deliver lower-cost retail power, the Prime Minister says, though he would give no no figures on how much prices would fall.

“This is about putting downward pressure on wholesale prices to make sure businesses and households have access to reliable and affordable power,” Mr Morrison told The Sydney Morning Herald.

Energy Minister Angus Taylor said the project would reduce wholesale energy costs through increased competition.

“This is great news for the energy-intensive industries, and the jobs and regional economies that rely on them,” he said.

Mr Taylor also said TransGrid would also upgrade the Victoria-NSW Interconnector (VNI) in conjunction with the Queensland-NSW Interconnector (QNI).

“[The projects will] strengthen the backbone of the national electricity market, reduce network bottlenecks and make the energy market more efficient,” he said.

The project is should begin in late 2021, with the Morrison government's underwriting a maximum of $51 million.

Regulatory approvals are still needed for the final stage, which could be operational by the summer of 2022-23.