New York -- First Solar Inc. won’t be building the world’s largest solar plant in China after more than four years of negotiations on pricing failed to produce an agreement.
First Solar had planned to build the 2,000-megawatt Ordos project in Inner Mongolia and sell the output to China’s power grid. Terms for selling the power were never agreed to, said Steve Krum, a spokesman for Tempe, Arizona-based First Solar.
“Due to the market environment, we aren’t going to pursue the Ordos project further,” Krum said today in an interview. The plant was never included in the company’s pipeline of contracted projects, he said.
Ordos was First Solar’s first foray into China, the world’s largest producer of both solar panels and greenhouse gases. First Solar agreed to build the project and consider opening a manufacturing plant in the region in a memorandum of understanding with Chinese officials on Sept. 8, 2009.
First Solar rose 13 percent the day the plan was announced. The shares fell 0.5 percent to $63.38 at 12:29 p.m. today in New York.
Copyright 2014 Bloomberg.
RenewableEnergyWorld.com covered the story when it was originally announced. Our coverage of the September 9, 2009 Memorandum of Understanding is here with the most recent announcement below.
Story from November 18, 2009
First Solar Inc. has reached a cooperation framework agreement with the Chinese government that takes another critical step towards the realization of the world's largest solar power plant in the autonomous region of Inner Mongolia, China.
First Solar President Bruce Sohn and Mayor Yun Guangzhong of the Ordos City Government signed the Cooperation Framework Agreement in the presence of Chinese Vice Premier Li Keqiang, Vice Minister Liu Qi of the National Energy Administration, and U.S. Secretary of Energy Steven Chu.
The agreement between First Solar and Ordos spells out additional project details and local support that advance the development of the 2-gigawatt (GW) solar power plant and confirm the June 1, 2010 expected construction start date for the 30 megawatt (MW) Phase 1. First Solar and Ordos also agreed to establish two committees to ensure the successful execution of the project and to develop a new energy industry in Ordos.
“This Cooperation Framework Agreement and its recognition by the National Energy Administration mark a critical step forward in the approval process for the Ordos project, one of the world’s most ambitious renewable energy projects,” said Rob Gillette, First Solar's CEO. “It reinforces the commitment of First Solar, the Chinese government, and the Ordos local government to make an immediate contribution to the development of a healthy solar industry in China and to the reduction of greenhouse gas emissions.”
The signing ceremony took place as part of the U.S.-China Summit where U.S. President Barack Obama and Chinese President Hu Jintao met to discuss upcoming global climate change negotiations and clean energy, among other topics.
The 2-GW First Solar project is to be built in multiple phases, beginning with the 30-megawatt (MW) Phase 1. Phases 2, 3 and 4 are to be 100 MW, 870 MW, and 1,000 MW, respectively. Phases 2 and 3 are to be completed by 2014 and Phase 4 is to be completed by 2019.
The project is part of a planned 11.95-GW New Energy Industry Demonstration Zone in Ordos City, Inner Mongolia. The New Energy Industry Demonstration Zone is expected to combine solar, wind, hydroelectric and biomass power sources to provide a steady supply of renewable energy to the region that includes the Chinese capital.
Final agreement between the parties is subject to the negotiation and execution of definitive agreements among the parties.
Lead image: Canceled via Shutterstock