Last week, Gemasolar, a 19MW solar tower plant located near Seville in southern Spain, delivered electricity continuously over a 24-hour period to the grid.

Solar energy and baseload power are not usually two words that detractors of renewable energy allow to be included in the same phrase, unless it is accompanied by the word “not.” From now on though, they may become indelibly linked.

Last week, Gemasolar, a 19MW solar tower plant located near Seville in southern Spain, delivered electricity continuously over a 24-hour period to the grid.

It is the first time that a commercial-scale solar power plant has been capable of generating electricity through the day and the night, and it has come less than a month since the plant, equipped with molten salt storage facilities that can provide power for 15 hours without the sun, began commercial production.

It’s happened well ahead of expectations and the plant operators – a joint venture between the Abu Dhabi-based clean energy initiative Masdar and Spanish engineering group SENER – were hopeful that it could average 20 hours of energy generation a day by the end of this week.

Gemasolar uses solar tower technology which can deliver high temperatures, making the storage more efficient and therefore cheaper. Eventually, the plant is expected to supply 24 hours of uninterrupted production per day on most summer days, and be able to deliver higher annual capacity factors than most nuclear power plants and approach that of coal.

It promises to be a game changer for the industry. But solar, is not quite ready to declare its independence from fossil fuels just yet, as there is a steep cost curve to fall, and some technologies will rely on hybrid plants that use gas to “firm” supply rather than storage.

Australia, however, is unlikely to see this sort of breath-taking new technology for years – despite some valuable research activity – unless there is a step change in the way that new technologies are funded in this country.

An opportunity to do so will present itself at week’s end, first on Friday with a roundtable on large-scale solar energy in Canberra, and then on Sunday when the details of a multi-billion dollar clean energy fund are unveiled as part of the carbon pricing package. Hopefully, this fund will find a way for this money to be spent, rather than merely allocated.

The roundtable has been called by the Greens and the solar industry to try and shake the federal government, or more particularly Energy Minister Martin Ferguson, away from the obsession with grant-based funds, and more toward the tariff-based assistance that has enabled plants such as Gemasolar to be constructed, or loan guarantees that will underwrite the rollout of 11 gigawatts of solar thermal technology in coming years in the US.

Grants based system appear cost effective, but that might be because the money rarely gets spent, as a recent Grattan Institute analysis point out. The federal government’s much vaunted $1.5 billion Solar Flagships program has recently chosen two winners for the first round of funding and might be the first of the large scale clean energy projects to be built. But that will probably be until 2015 before they are completed, and round 2 – which will likely support a more varied example of smaller-scale projects, will not open for applications until 2013.

What the solar industry – be it PV or the multitude of competing solar thermal technologies – will tell the government on Friday is simple and will echo the conclusions of the International Energy Agency: solar has the potential to provide 5 per cent of Australia’s total power needs by 2020, and more than 40 per cent by 2050, but it can’t done by theory, it has to be done in practice, and early policy is support is crucial.

James Harding, the head of renewables of German solar energy developer Ferrostaal IPS, told earlier this year: “It cannot be an option for Australia to sit on the sidelines and wait for the technologies and supporting industries to develop elsewhere in the world. We should embrace the natural advantages we have here in solar resources (good sites in Australia would yield 25 per cent more solar thermal power than equivalents in Spain), and play a leading role in developing the technologies and a strong local capacity."

Andrew Want, the head of the newly established Australian Solar Thermal Energy Association, told earlier this week that the industry itself had not been effective in educating policy makers about the technologies, their potential and their cost trajectories, and what had been achieved in the cost trajectories. “It’s a much more compelling technology than is understood in Australia now,” he says.

On cost, there is no doubt that Gemasolar is starting high, with a capital cost of around $18 a watt. But it is the first of its type, and the optimum size is likely to be in 100 MW to 150 MW range.

The IEA, in a solar thermal technology roadmap published last year, said CSP (concentrated solar power, as it is also known) could compete with fossil fuel plants for peak and intermediate load as early as 2015 on a megawatt per hour basis, at least in those countries with excellent solar resources – Australia, northern Africa, the Middle East, and western regions of China and the US are considered the best. The IEA said CSP could compete with the costs of baseload power by 2020, depending on how CO2 emissions are priced.

In a more recent report by GTM Research, which noted that the US, Spain and China will dominate the rollout of solar thermal power in coming years, said CSP may find it difficult to catch up with solar PV on a cost per kWh basis, but it would be able to differentiate itself with its ability to provide more stable, dispatch-able power by integrating thermal storage.