Pacific Gas and Electric, (PG&E) has entered into a contract to buy 177
megawatts of power from a solar thermal power plant that will be built
by Ausra.

The power plant will be located in San Luis Obispo county in central
California and provide, roughly, enough power for 60,000 homes. Ausra
has filed applications to build the plant with the California Energy
Commission and hopes to have the plant up and generating power in 2010.

This won't be the last solar thermal contract PG&E will sign. PG&E says
it plans to get a gigawatt worth of power from solar thermal systems in
five years. Another likely partner is Brightsource Energy. The company,
a reincarnation of an Israeli company, also plans on building plants in
California. PG&E already has an agreement to buy 533 megawatts from
Solel, which has a solar thermal plant in the Mojave Desert.

The utility is shooting to get 20 percent or more of its electricity
from renewable sources, not including traditional hydroelectric power,
by 2010. It currently gets 12 percent of its electricity now from
renewables and has contracts that push it up to 18 percent. Most of its
renewable energy so far comes from wind and biomass: PG&E right now gets
only a little of its power from solar.

In solar thermal plants, mirrors to collect heat from the sun. The heat
turns a liquid into a gas, and the pressure from the gas cranks a
turbine. Excess heat can be stored in molten salt to generate
electricity when the sun goes down. Heat, salt, water, mirrors:
technically, these are components that have been used by engineers since
Tacitus. The plants, though, are quite complex: typically, solar thermal
plants take up hundreds of acres, cost millions to erect, and take years
to build.

Despite the complexity and scale, many scientists and energy experts say
that large solar thermal plants can generate power at a cost that's
comparable with some types of traditional fossil fuel plants, a
significant milestone.

Ausra, from Australia, says it can dramatically cut the costs of
building solar thermal plants. Rather than employ parabolic mirrors,
Ausra's system uses cheaper flat mirrors. The liquid is water too,
rather than oil. Real estate is additionally economized. The San Luis
Obispo plant will only occupy a square mile, or 640 acres.

Less land means that the plants can be built closer to population
centers. Connecting these plants to the grid costs about $1.5 million a
mile in transmission lines. Ausra, which recently raised $40 million in
a venture funding round, signed a deal for a 300 megawatt plant in
Florida earlier this year.