US energy giant First Solar on Tuesday won a deal with China to build the world's largest solar power plant in the Mongolian desert which officials say could mitigate climate change concerns. First Solar will construct the two-gigawatt plant in Ordos City, Inner Mongolia, under a memorandum of understanding (MOU) inked Tuesday with Chinese officials at the company's headquarters in Tempe, Arizona.
The solar facility is to be built in four phases over a decade and supply power to three million Chinese homes, the company said in a statement. "We're proud to be announcing this precedent-setting project today," First Solar chief executive Mike Ahearn said in the statement.
The United States and China, he said, could work together to reduce the cost of solar electricity to "grid parity" - where it is competitive with traditional energy sources - and "create the blueprint for accelerated mass-scale deployment of solar power worldwide to mitigate climate change." The financial terms of the deal were not disclosed but First Solar said that if a similar plant were to be built in the United States, the cost would be about five to six billion dollars.
"In China, due to lower labour costs and other factors, we expect the plant cost would likely be lower," Lisa Morse, First Solar spokeswoman, told AFP. "We are not speculating on what the actual cost of a plant might be in China since details of the project still have to be determined," she said.
China's chief legislator, Wu Bangguo, the second-most powerful leader in the ruling Communist Party after President Hu Jintao, witnessed the signing of the MOU. Wu is expected to meet with US congressional leaders and officials in President Barack Obama's administration in Washington on a variety of energy, trade and business initiatives.
Wu and other Chinese officials discussed with First Solar executives the "significant potential" for the two nations to address global climate change through markets that took advantage of their solar resources, the US company said. The MOU outlined a long-term "strategic partnership" between First Solar and Ordos City, where the US firm could consider establishing a solar panel manufacturing investment.
"Discussions with First Solar about building a factory in China demonstrate to investors in China that they can confidently invest in the most advanced technologies available," said Cao Zhichen, vice mayor of Ordos municipal government. China has expressed plans to provide 10 percent of its energy from renewable resources by 2010 and 15 percent by 2020, including from wind, hydro, biomass and solar. Various state incentives are being introduced for such growth.
While current Chinese solar installations total about 90 megawatts, Beijing has boosted its previous solar capacity goal of 1.8 gigawatts by 2020 to two gigawatts by 2011, and 10-20 gigawatts by 2020, according to a statement issued in conjunction with the MOU signing. The first phase of the Ordos solar power plant will be a 30-megawatt "demonstration" project that will see construction begin by June 1, 2010, officials said. The second and third phases will be 100-megawatt and 870-megawatt projects, expected to be completed by the end of 2014, while the fourth phase will be a 1,000-megawatt facility tipped to be completed by end 2019.