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California energy utility PG&E has agreed to buy power from a 177-megawatt solar thermal plant to be built by Silicon Valley company Ausra.

Ausra, of Palo Alto, Calif., is applying for a regulatory permit to build on 640 acres of ranch land in California’s San Luis Obispo county.

The idea behind solar thermal power is focusing mirrors on contained water, which then turns to steam that can drive turbines. We last reported on Ausra two months ago, when it raised $40 million from Khosla Ventures and Kleiner Perkins Caufield & Byers.

Ausra’s execution of the deal, if it goes through will help the company catch up with competitor BrightSource, which just cleared the regulatory hurdle for a 400-megawatt plant in the Mojave Desert last week, according to Green Wombat.

Although PG&E has now committed to buying over a gigawatt of solar thermal energy in coming years, it remains to be seen which startup’s designs are most effective.

Technology used by companies like BrightSource and Solel uses special curved mirrors to focus more light, and thus create more steam than Ausra’s plants. However, the latter’s approach, which uses mass-produced flat mirrors, is cheaper, the company says, potentially bringing the cost for solar thermal energy as low as coal-fired plants.

The technology for solar thermal itself has existed for decades. Photovoltaic cells, which directly capture sunlight, may possibly become cheap enough to be a viable replacement.

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