In the latest sign that solar projects are growing larger, China announced plans Tuesday to build the world’s largest solar power plant in Dunhuang, a city in the northwestern Gansu province.

China

The plant, which will take five years to build, will yield 100 megawatts of peak capacity and will cost an estimated 6.03 billion yuan (about $766 million), according to the state-run Xinhua news agency.

That’s small compared to conventional coal-fired plants, which generally have capacities in the “hundreds of megawatts, if not a thousand megawatts,” said Joel Serface, director of the Austin Clean Energy Incubator.

But it’s large for solar, and it’s only one of several projects claiming to become “the world’s largest,” rapidly growing the world’s solar energy capacity.

Still, the latest announcement is significant news because China could potentially become one of the “world’s largest markets” for solar power, said David Saltman, chief executive of solar company Open Energy.

China

“This represents the fastest-growing nation on earth making a commitment to renewable energy,” he said. “China’s going to happen in a big way. No doubt China is going to capture a big part of the market. They have to, because right now they’re relying so much on coal and just killing their environment.”

China

It’s also a change for the country because most solar announcements coming from China in the last couple of years have been about production increases for solar equipment to be exported to other countries, Mr. Serface noted.

China

“This shows they are finally getting into the power business themselves,” he said. “That’s very exciting and it’s going to make a difference, because they’re not only shipping energy, but using it for their own energy independence and their own supply.”

Rise of ‘World’s Largests’

The current holder of the title of world’s largest project is solar panel producer Solon’s 12-megawatt Solarpark Gut Erlasee, dedicated in September near Arnstein in Bavaria, Germany.

dedicatedGermany

That park outshone the previous largest, the 10-megawatt Bavaria Solarpark in Muehlhausen, Guenching, and Minihof, Germany, which solar-integrator PowerLight said began producing power in January of last year. The Bavaria Solarpark in turn eclipsed Shell’s five-megawatt power plant near Leipzig, Germany, previously the world’s largest.

Leipzig, Germany

The race is on to build the next biggest plant. “There’s a war going on right now to come up with the biggest solar plant, which is a good war to fight,” Mr. Serface said.

In April, GE Energy Financial Services, along with PowerLight and utility Catavento, said they expected their 11-megawatt plant to be the world’s largest when it’s competed in January—but the plant already has been beat by the Solon project (see GE Funds Largest Solar Plant).

GE Funds Largest Solar Plant

In February, solar financing company SunEdison and renewable project integrator Powered by Renewables announced they are working on a solar project in Nevada that will total around 18 megawatts.

Nevada

With a chuckle, CEO Jigar Shaw said at the time that he expected it would be the world’s largest when it opened, “but for how long, we don’t know.” The SunEdison project is scheduled to be finished by early 2008.

In the meantime, PowerLight earlier this month broke ground on a 20-megawatt project in Spain for the utility Elecnor. The Israeli government is also building a 100-megawatt solar power plant to supply electricity to homes in southern Israel, and could eventually expand the project to a whopping 500 megawatts.

broke groundIsrael

And the Australian government announced in October its bid to build the world’s largest plant, a 154-megawatt plant in the state of Victoria, expected to begin operations in 2008 and reach full capacity by 2013.

Victoria

Southern California Edison and San Diego Gas & Electric are also working with startup Stirling Energy Systems to build two even larger solar farms—a 300-megawatt farm near Calexico, California, and a 500-megawatt farm near Victorville, California—using solar dishes and stirling engines.

CalexicoVictorville, California

The project is expected to begin in mid-2008, and will take three to four years to complete. That gives other companies a few years, and room for plenty more “world’s largests” along the way.

Bigger is Better

Mr. Serface expects them to be built. “We’re going to see larger quantities of these large plants in the future,” he said. “Installing one large plant is easier than having a whole set of installers figure out how to put a whole bunch of photovoltaic modules on rooftops. Larger is easier, and it brings the cost down.”

Installing one large plant is easier than having a whole set of installers figure out how to put a whole bunch of photovoltaic modules on rooftops. Larger is easier, and it brings the cost down.”

Vinod Khosla, head of Khosla Ventures, said in October that the potential market for large, centralized solar plants is larger than for rooftop systems (see Khosla Touts Centralized Solar). But others say distributed systems make more sense because they eliminate the need for transmission lines.

Khosla Touts Centralized Solar

Open Energy, for instance, is pursuing solar power systems that are integrated into building materials, said Mr. Saltman. “I don’t want to see solar commoditized,” he said.

Still, the news from China—and the large plants in general—is good for the industry and the world, he noted.

China

“We need to have a goal of having 50 percent of our total energy requirements satisfied by renewable energy in the next 15 to 20 years,” said Mr. Saltman. “If we’re going to have any impact on global warming and truly slow down emissions with CO2 and greenhouse gases, we really have to build the industry in a much more rapid fashion than we’re even doing today. This is an indication that it’s possible and that there’s a public will to do that.”

Contact the writer: JKho@RedHerring.com