Solar Systems Australia will receive $75 million for a large-scale 154-megawatt solar power project in Victoria’s northwest Mildura region.

Heliostat mirrors – designed to reflect the sun’s rays in a constant direction, automatically allowing for the rotation of the earth – will be used at the power station to focus concentrated sunlight onto high-efficiency photovoltaic cells to generate electricity.

Such a solar power station would be one of the biggest in the world, but would produce only a quarter the power of a small coal-fired station.

Meanwhile, International Power (Technologies) will receive $50 million for its proposed coal-drying project in Latrobe Valley, also known as the Hazelwood 2030 project.

The demonstration project will retrofit brown coal drying technology, and a pilot carbon dioxide capture and sequestration facility.

The two projects, which have also received financial support from the Victorian Government, are the first to be sponsored under the Australian Government’s $500 million low emissions technology demonstration fund, which was announced by Prime Minister John Howard in his weekly radio address on Monday.

Treasurer Peter Costello said ensuring the energy sector was environmentally sustainable in the longer-term was a key factor in the government’s $2 billion climate change strategy.

“Technological improvements will be instrumental in delivering large-scale reductions in emissions both in Australia and throughout the rest of the world,” Costello said.

“The challenge is to reduce the cost of these technologies so that a range of competitively priced low emission technologies are available.”

Industry Minister Ian Macfarlane said technological options would allow Australia to apply the best solutions to its future energy needs.

“Our international partners in the Asia Pacific Partnership on Clean Development and Climate (AP6) will also benefit from our expertise and the lessons learned,” Macfarlane said.

“Following successful large scale demonstration of its solar technology, Solar Systems intends to commercialise the technology domestically and internationally through the AP6 initiative.”