US energy giant First Solar 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 officer Mike Ahearn said in the statement.
The US 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."
"In China, due to lower labour costs and other factors, we expect the plant cost would likely be lower," Lisa Morse, First Solar official said.
"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, 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.
China has expressed plans to provide 10 per cent of its energy from renewable resources by 2010 and 15 per cent 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, next year, officials said.