"Massive Spanish-German solar project enters second phase"

MADRID (Thomson Financial) - The Spanish group ACS and German partner Solar Millennium said on Wednesday they had begun the second phase of a massive solar power project near the southern city of Granada.

The companies said they were investing 260 mln eur in 'the largest solar power plant in the world', a solar thermal facility that is to cover 195-hectares.

According to the German firm, the second phase of the Andasol-2 project will come online in early 2009 and supply 'environmentally-friendly solar electricity to as many as 200,000 people.'

Several German firms, including Siemens (nyse: SI - news - people ), are providing the technology while ACS/Cobra of Spain is handling the bulk of the construction work.

Solar Millennium says it also plans to develop a third power plant at the site in conjunction with Portuguese energy group EDP.

According to ACS, the plants, each of which is to generate 650 megawatts of electricity, will reduce carbon dioxide emissions by 150,000 tonnes per year.

Solar Millennium said that by 2050, 15 pct of European energy needs would be met by solar power plants in North Africa and the Middle East.

Last month, environmental campaigners urged the government in Madrid to commit to switching completely to renewable energy sources by that date.

Spain is currently second only to Germany in Europe in terms of installed wind power capacity and is a European leader in the use of renewable energy in general.

Spain's Socialist government campaigned in 2004 in part on a pledge to abandon progressively the country's nuclear programme, which accounts for 23 pct of national electricity production.

In March, the European Union set a goal a 20 pct cut in greenhouse gas emissions by 2020 compared with 1990 levels, but Germany is targeting a cut of up to 40 pct.