The CSIRO on Tuesday will sign a technology licensing agreement with a Chinese solar company that could reap millions of dollars in royalties for the national science and industry organisation.
The deal with Beijing-based Thermal Focus will allow the company to bid for business in the burgeoning Chinese market for concentrated solar power using Australian-designed technology.
China aims to build infrastructure that produces 1.4 gigawatts of concentrated solar power by 2018, increasing this to 5GW by 2020.
"To put that into perspective, Australia has 50GW capacity in all its power stations," said Wes Stein, CSIRO's chief energy research scientist.
John Grimes, of the Australian Solar Council, said: "This is a significant commercial opportunity, perhaps worth hundreds of millions."
CSIRO chief executive Larry Marshall said: "This partnership takes our climate mitigation focus to a global stage."
Minister for Industry, Innovation and Science Greg Hunt said: "Australia is a leader in clean energy technology and this partnership is an important step in realising this advantage."
The partnership will be signed at the Asia-Pacific Solar Research Conference at the Australian National University.
Concentrated solar power, or solar thermal, uses mirrors to focus the sun's energy into a collector. At collected temperatures of 560 degrees, that energy is then stored in molten nitrate salts in large thermal tanks. This can then generate superheated steam to drive turbines for electricity generation for weeks.
CSIRO's patented technology uses smaller mirrors of about five square metres, known as heliostats, and field-control software to direct the solar energy.
The technology was pioneered at the CSIRO's energy centre in Newcastle. The solar thermal team has grown to more than 30 scientists and engineers.
Mr Stein said: "The big difference with photovoltaic cells is that our technology has storage embedded at a lower cost than batteries."
A CSIRO spokesman said the licensing agreement covered a technology transfer payment with recurring royalties for the number of heliostats installed.
"Organisations in China are bidding separately for equipment supply for each plant. It is a competitive process," the spokesman said.
Industry estimates put the cost of concentrated solar plants near $4000 a kilowatt. About 40 per cent of that cost is in the heliostat field of perhaps thousands of mirrors.
That means by 2020, the size of the heliostat market in China will be about $8 billion.
Wei Zhu, of Thermal Focus, said the company's long-term target was to have 15 per cent of that market, or $1.2 billion.
He said the company's first commercial project would probably be in the Inner Mongolia desert region about 800 kilometres north-west of Beijing.
"CSIRO's technology combined with our manufacturing will help deliver solar thermal as an important source of renewable energy in China," Mr Zhu said.
The biggest shareholder in Thermal Focus was Elion Resources Group, he said. Elion's chairman, billionaire Wang Wenbiao, is a well-connected senior member of the Chinese Communist Party.
John Grimes at the Australian Solar Council said: "CSP with storage is the missing link in China's renewable energy market."
Mr Grimes said what gave this deal credibility was that the Chinese had delivered on their plans in renewables.
"Already China has installed 120GW of solar photovoltaic cells," he said. "It really is a world leader in this field."
Its commitment was partly due to a combination of environmental concerns, cost effectiveness and air-quality pressures in cities, Mr Grimes said.
There are no commercial plants operating concentrated solar thermal technology in Australia. He said this was because government leadership in Australia had been lacking.
However, there are some companies working towards this: Vast Solar, SolarReserve and SolarStor, which is backed by former Liberal leader John Hewson.
SolarStor plans to build a concentrated thermal plant near Port Augusta, South Australia, as does US firm SolarReserve.
The solar deal comes a day after an interim report by a Senate committee recommended all Australian coal mines close by 2030.
The retirement of coal-fired power stations report committee is chaired by Greens senator Larissa Waters. Its final report will be handed down on February 1.
