Ausra Inc. started operating its first U.S. solar-thermal plant in Bakersfield, Calif. on Thursday, a milestone for the startup as it plans to build a 177-megawatt plant next year.

The Palo Alto-based startup drew California Gov. Arnold Schwarzenegger to praise the opening of the five-megawatt Kimberlina Solar Energy plant, the first solar-thermal plant to be built in the state in nearly 20 years.

The plant will allow Ausra to demonstrate its technology as it develops the 177-megawatt Carrizo Plains project in San Luis Obispo, Calif., company spokeswoman Katherine Potter said (see Ausra to Build 177-Megawatt Solar-Thermal Plant).

Carrizo Plains, set to start delivering power to Pacific Gas and Electric Co. by 2011, is among a number of large-scale solar-thermal plants being built in California, where utilities are striving to meet a state mandate of having 20 percent of their power come from renewable sources by the end of the decade.

Aside from Ausra, companies including eSolar Inc. and BrightSource Energy Inc. are among the solar-thermal startups that have signed deals with California utilities to deliver hundreds of megawatts of energy in the coming years.

Each has developed ways to use the sun's rays to heat liquids that drive steam turbines to generate electricity, a method that can offer significant cost savings over other solar technologies. (See California to Get More Solar-Thermal, Funding Roundup: Solar-Thermal Heats Up Despite Cool VC Climate.)

"I'm optimistic it can scale up and be very significant as a means of producing power," said Robert Wilder, CEO of WilderShares, which manages several clean-energy indices.

Ausra claims its compact linear Fresnel reflector technology - fields of mirrors to heat water into steam - can deliver power at 10.4 cents per kilowatt-hour today. That's far below the solar-thermal power industry's estimated costs of 16 to 18 cents per kilowatt-hour. Ausra further claims that within three years it could bring those costs down to 7.9 cents per kilowatt-hour, which would be competitive with energy from a coal-fired power plant.

Ausra declined to disclose the cost of its Bakersfield plant and has not said how much its 177-megawatt Carrizo Plains plant is expected to cost, citing confidentiality agreements.

But solar-thermal technologies have yet to prove themselves in the field, given the limited number of solar-thermal plants in operation

"I'm concerned there have been some overly optimistic forecasts on how cheaply they can produce power," Wilder said. "I'll be very curious to see how the numbers pan out with big solar-thermal."

Ausra raised $60.6 million in October to complete the Bakersfield plant and continue research and development of solar-thermal technology. Investors include KERN Partners, Generation Investment Management, Starfish Ventures, Khosla Ventures and Kleiner Perkins Caufield & Byers (see Ausra Bags $60.6M to Finish Plant). The two-year-old company also received about $40 million from Khosla and Kleiner last year (see Ausra Raises $40M from Concentrating Solar-Thermal).

In June, Ausra opened a factory for the components of its solar facilities in Las Vegas, which the company said would be able to produce up to 700 megawatts of solar-thermal equipment annually (see Ausra to Build World's Largest Solar-Thermal Factory).

But Ausra is not the only company with big plans for California and the American Southwest, which is seen as the best U.S. market for solar-thermal plants, since they require much more space and need stronger and more direct sunlight than power plants using solar panels.

Pasadena, Calif.-based eSolar in June announced a deal to build 245 megawatts of solar-thermal plants by 2011 for utility Southern California Edison. The startup in April landed a $130 million investment from Google.org, IdeaLab, Oak Investment Partners and other investors (see Google Heats Up eSolar with $10M, New eSolar VP Sees Past, Future of Solar-Thermal and Q&A: Bill Gross Puts a Shine on Solar).

Oakland, Calif.-based Brightsource in May landed $115 million, one month after it announced it would provide up to 900 megawatts to PG&E.

And in April Phoenix-based Stirling Engine Systems – which employs a different technology using the sun's heat to power an electricity-generating engine – raised $100 million from Dublin firm NTR and is planning to build 1.7 gigawatts of solar farms, starting with a 300-megawatt plant in El Centro, Calif., for San Diego Gas & Electric.

Last year, Israel-based Solel Solar Systems announced it is building a large solar park in California after PG&E agreed to buy all 553 megawatts of the park's capacity, and Spain's Acciona Energy closed $266 million in project financing for its 64-megawatt Nevada Solar One project.

Of course, not all projects that are announced actually get built. According to the California Energy Commission, 12 percent of the renewable-energy contracts signed by publicly owned utilities since 2002, when the state's renewable-energy portfolio was established, have been canceled. Another 20 percent have been delayed.

Besides its California projects, Ausra has a solar-thermal plant in Australia and is increasing that project to 5 megawatts by January and up to 12 megawatts later. The company also is working on installing a 6.5-megawatt project in Portugal that it expects to finish in 2009.