eSolar secures deal for China's largest concentrated solar power plant

US solar energy firm eSolar has announced a landmark deal that will see the company license its technology for use in China's largest concentrated solar power (CSP) plant.

The deal, which was signed late last week, will see California-based eSolar partner with Penglai Electric, a privately-owned Chinese electrical power equipment manufacturer, to build at least 2GW of solar thermal power plants in China over the next decade.

The companies said that construction work on the first 92MW solar thermal plant will begin later this year at the Yulin Alternative Energy Park, and will be co-located with a new biomass power plant, creating a renewable energy hub at the site.

eSolar's solar thermal tower technology works by using mirrors to concentrate the sun's power on a central tower. The concentrated heat is then used to create steam, which in turn drives a turbine to generate electricity.

Zhao Weikang, chairman and president of Shaanxi Yulin Huayang New Energy Co, which will own and operate the 92MW plant when it is completed, said that eSolar's approach represented the "only CSP tower technology that has demonstrated commercial maturity and economic feasibility".

The size of the deal was undisclosed but, according to reports, analysts believe it could be worth over €5bn to the US firm.

The deal will also underline eSolar's position as one of the world's leading solar energy firms. The company recently opened its first solar tower in the US, has a number of deals in place with US utilities, counts Google amongst its coalition of blue chip investors, and has agreements in place to develop solar plants in Africa, India and now China.

eSolar founder and chief executive, Bill Gross, told Reuters that China was likely to prove a lucrative market for the company over the next decade, particularly given government plans to roll out over 10,000MW of solar energy capacity by 2020.

"China wants to build on a very large scale," said Gross. "Over time there will be demand for two terawatts – two thousand times what we're making right now."