Solar power plants in deserts using mirrors to concentrate the sun's rays have the potential to generate up to a quarter of the world's electricity by 2050, a report by pro-solar groups said on Monday.

The study, by environmental group Greenpeace, the European Solar Thermal Electricity Association (ESTELA) and the International Energy Agency's (IEA) SolarPACES group, said huge investments would also create jobs and fight climate change.

Solar power plants are the next big thing in renewable energy, said Sven Teske of Greenpeace International and co-author of the report. The technology is suited to hot, cloudless regions such as the Sahara or Middle East.

The 28-page report said investments in concentrating solar power (CSP) plants were set to exceed 2 billion euros ($2.80 billion) worldwide this year, with the biggest installations under construction in southern Spain and California.

Concentrating solar power could meet up to 7 percent of the world's projected power needs in 2030 and a full quarter by 2050, it said of the most optimistic scenario.

That assumes a giant surge in investments to 21 billion euros a year by 2015 and 174 billion a year by 2050, creating hundreds of thousands of jobs. Under that scenario, solar plants would have installed capacity of 1,500 gigawatts by 2050.

That is far more optimistic than business-as-usual projections by the Paris-based IEA, which advises rich nations. It indicates that by 2050 the penetration of solar power would be no higher than 0.2 percent globally, the report noted.

CSP uses arrays of hundreds of mirrors or lenses to concentrate the sun's rays to temperatures between 400 and 1,000 Celsius (750-1,800 Fahrenheit) to provide energy to drive a power plant.

SUNNY

It differs from solar photovoltaics, which turn the sun's rays directly into electricity in panels and generate some power even on overcast days. CSP works only under sunny skies.

We now have a third billion-dollar technology alongside wind and solar photovoltaics, Teske told Reuters.

The report said generation costs range from 0.15 to 0.23 euros per kilowatt hour -- above fossil fuels or many renewables -- and would fall to 0.10-0.14 euros by 2020. Guaranteed sales prices were needed to spur investments, it said.

CSP installations made up just 430 Megawatts of the world's electricity generation capacity at the end of 2008.

CSP plants can deliver reliable industry-scale power supply around the clock due to storage technologies and hybrid operations within the power plant, said Jose Nebrera, president of ESTELA.

(Editing by Richard Williams),

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