January 11, 2010 / 6:30 PM / 8 years ago

UPDATE 1-U.S. solar thermal firm in deal for China power project

* First 92 megawatts to be built in 2010

* Venture follows First Solar’s plans to build in China

* Deal is part of China’s goals to use more clean power (Adds background, executive comments)

HONG KONG, Jan 11 (Reuters) - U.S. solar thermal power company eSolar said it has reached a deal to license its technology to a Chinese power equipment maker that plans 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 produce at least 10,000 MW of solar energy and 20,000 MW of wind power by 2020.

The solar thermal company’s plans are matched only by solar industry bellwether First Solar Inc (FSLR.O), which in September announced plans to develop a huge photovoltaic solar plant in China in a separate deal that marked the first major foray by a U.S. company into the Asian nation’s fast growing alternative energy sector. [ID:nN08211624]

“China wants to build on a very large scale ... Over time there will be demand for 2 terawatts -- two thousand times what we’re making right now,” said eSolar’s founder and chief executive, Bill Gross, in an interview.

Gross said equipment maker China Shandong Penglai Electric Power Equipment Manufacturing Co will develop solar thermal plants using eSolar’s technology under a licensing agreement.

ESolar, whose investors include Google Inc (GOOG.O), 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. Photovoltaic technology uses arrays of solar panels to convert sunlight directly into electricity.

    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 also include technology incubator Idealab and Oak Investment Partners. (Reporting by Leonora Walet in Hong Kong and Laura Isensee in Los Angeles; Editing by Chris Lewis and Steve Orlofsky)

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