A giant solar thermal power plant will be built in South Australia to supply all of the state government's energy needs.
A giant solar thermal power plant, made up of 12,000 billboard size mirrors collecting the sun's rays, is to be built in South Australia's mid-north.
Work on the SolarReserve facility, the largest of its kind in the world, will start in 2018, creating 650 construction jobs and 50 ongoing positions.
It's expected to be up and running by 2020 when it will start providing the power required for the state government's schools, hospitals and other facilities under a 20-year deal.
It uses mirrored panels to concentrate sunlight onto a central receiver at the top of a 220-metre high tower.
That process heats molten salt to 565 degrees celsius with the heat used to generate steam, drive a turbine and produce 150 megawatts of electricity, even when the sun doesn't shine.
Premier Jay Weatherill says the project will deliver more energy to the local market and put downward pressure on power prices.
He says the plant, to be called Aurora and to be built about 30km north of Port Augusta, can provide power at a cheaper cost than a coal-fired facility.
The government will pay no more than $78 a megawatt hour.
"Renewable technologies are now cheaper and importantly renewables are now providing certainty and stability to the market," Mr Weatherill said.
"This is a massive game-changer for the energy market in this country."
SolarReserve chief executive Kevin Smith said the company would use the $110 million equity investment promised in the federal budget to help fund the plant.
"Aurora will provide much-needed capacity and firm energy delivery into the South Australian market to reduce price volatility," Mr Smith said.
Port Augusta community organisation Repower, which has long campaigned for a solar-thermal plant, has hailed the plant's construction as a big win for the local community.
"It sends a message to the rest of the country that we can have renewable energy day and night with this technology," spokesman Dan Spencer said.
Greens Senator Sarah Hanson-Young said the project would allow South Australia to step out of the shadow of dirty coal, echoing comments from the Conservation Council and the Climate Council.
SA Deputy Opposition Leader Vickie Chapman said the project was welcome and had been pursued for some time by the Liberals.
"The crying shame of this announcement today is that it isn't with a transition arrangement with the closure of (the coal-fired power station at) Port Augusta," Ms Chapman said.