The government said it would contribute 75 million dollars towards the cost of the photovoltaic solar power plant in the first of a series of projects aimed at reducing the greenhouse gas emissions blamed for global warming.

Australia, like the United States, has refused to sign the Kyoto Protocol on climate change and the government is facing increasing criticism of its environmental policies in the face of the worst drought in living memory.

Treasurer (finance minister) Peter Costello said the plant near Mildura in the southern state of Victoria would be the biggest of its kind.

"The project aims to build the biggest photovoltaic project in the world," Costello told the Australian Broadcasting Corporation.

The 154 megawatt power station will cost a total of 420 million dollars and will be built by Melbourne-based Solar Systems, which says it will reduce greenhouse gas emissions by about 400,000 tonnes a year.

The plant will generate clean electricity directly from the sun to meet the needs of more than 45,000 homes with zero greenhouse gas emissions, the company said in a statement.

It will use high performance solar cells originally developed to power satellites, with fields of mirrors focusing sunlight on the cells.

"Solar Systems has developed the capability to concentrate the sun by 500 times onto the solar cells for ultra-high power output," the company said.

A spokesman for the company told AFP that there was one bigger solar power station in the world, in the Mojave desert in California, but it used thermal solar technology.

"Thermal stations use concentrated sunlight to heat water to make steam and use steam to run a turbine," said technical director John Lasich.

"In this case we use concentrated photovoltaics where you take concentrated sunlight and convert it directly into electricity, which is much more efficient.

"This is a new generation of solar technology."

The project, which will receive an additional 50 million dollar grant from the Victoria state government, will start in 2008 and reach full capacity by 2013.

Costello said the government would also put 50 million dollars into a 360 million dollar pilot project to reduce, capture and store carbon dioxide emissions from a coal-fired power station in the same state.

A spokesman for environmental group Greenpeace, Danny Kennedy, welcomed the announcement and said the government was starting to bow to growing public pressure and concern about climate change.

With soaring temperatures and bushfires marking the start of another hot summer on the driest inhabited continent on earth, critics have stepped up their attacks on the government's environmental policies, blaming global warming for exacerbating the drought.

Last week Howard announced that 500 million dollars would be spent on a series of clean energy projects, and on Wednesday Costello said he accepted the scientific evidence on global warming.

"I accept the scientific evidence, which is that global warming is taking place, that it is caused by carbon emissions, that restraining the increase in carbon emissions will counteract that process of global warming and that we should play our part."

Australia produces more carbon dioxide per person than any other country in the world and is a major exporter of fossil fuels, which produce the gases blamed for rising temperatures worldwide.

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