A giant solar-thermal power plant to be built in South Australia’s mid-north has received development approval from the state government.

Construction will begin this year on SolarReserve’s $650 million Aurora plant at Port Augusta, creating 650 construction jobs and 50 ongoing positions, acting Energy Minister Chris Picton says.

“It’s fantastic that SolarReserve has received development approval to move forward with this world-leading project that will deliver clean, dispatchable renewable energy to supply our electrified rail, hospitals and schools,” Mr Picton said.

The 150-megawatt plant will use mirrored panels to concentrate sunlight onto a central receiver at the top of a 220-metre high tower.

The process heats molten salt to 565C with the heat used to generate steam, drive a turbine and produce 150 megawatts of electricity, even when the sun doesn’t shine.

SolarReserve chief executive Kevin Smith said the solar-thermal plant showed renewables could be competitive having won a tender against bids using fossil fuel.

“It is also a preview of the future of power generation around the world,” Mr Smith said.

The solar plant marks the end of a transition away from coal for Port Augusta with the closure of the city’s largest employer, Alinta Energy’s coal power station in 2016 and the Leigh Creek coal mine in 2015.

Since a statewide blackout in 2016, SA has made a push towards renewables including building the world’s largest lithium-ion battery at Jamestown.