U.S. solar thermal firm in deal for China power project

HONG KONG, January 11 Mon Jan 11, 2010 5:32am EST

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HONG KONG, January 11 (Reuters) - U.S. solar thermal power company eSolar, whose investors include Google Inc (GOOG.O), said it has reached a deal with a Chinese power equipment maker to build a 2,000 megawatt (MW) solar thermal power project in China over the next 10 years.

The deal comes as the Chinese government aims to boost renewable energy generating capacity in the country, with plans to generate at least 10,000 MW of solar energy and 20,000 MW of wind power by 2020.

In a statement, eSolar said equipment maker China Shandong Penglai Electric Power Equipment Manufacturing Co was developing solar thermal plants using eSolar's technology.

It did not disclose financial details of the deal, but analysts said the 2,000 MW project was the largest of its kind in China and could easily be worth more than $5 billion.

Solar thermal power uses the sun to heat water, producing steam to power a turbine and create electricity. The technology is seen by some as a viable replacement for fossil-fuel generators because such plants can rival the capacities of many conventional power plants.

eSolar said China Shandong Penglai was building the project along with a biomass electricity generation facility within an industrial park in Yulin, Shaanxi province.

China Shandong Penglai would operate the first 92 MW this year, the statement said.

The Pasadena, California-based company has deals with U.S. utilities, including NRG Energy Inc (NRG.N) to create more than 400 megawatts at solar thermal power plants in the U.S. Southwest. It recently opened its first commercial power plant in Lancaster, California. [ID:nNO955832]

eSolar's investors include technology incubator Idealab and Oak Investment Partners. (Editing by Chris Lewis)

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