The Australian government has given the go-ahead to build a $700-million environmentally friendly generator that could supply electricity to over 200,000 homes.

At one kilometre high, the tower is set to be the tallest human-made structure in the world. It will be the first large-scale attempt to convert solar energy into non-polluting electricity.

The plant will consist of two parts: a massive, greenhouse-like solar collector, and a giant tower that will produce power by moving hot air through turbines.

Artist's rendition of power plant

The project has been dubbed the Solar Mission Project by its creators, an Australian renewable energy firm called Enviromission.

"It's driven by the old principle that hot air rises," CEO Roger Davey told CBC Radio's As It Happens. The air collected in the greenhouse rises up the chimney-like tower, where turbines blow it up and out of the tower.

Davey says the plant works 24 hours a day, seven days a week. Best of all, he says, "it produces power like a conventional plant without the pollution." He even says fruits and vegetables can be grown on the perimeter of the greenhouse.

Tower prototype in Manzanares, Spain

Twice the height of the CN Tower

Engineers plan to build the plant by 2005 outside the countryside town of Mildura, about a 5½-hour drive from Melbourne. Scientists have already built a successful prototype in Manzanares, Spain. The plant operated from 1982 and 1989 and had a consistent output of 50 kilowatts of green energy.

While the plant will be environmentally friendly, others worry the kilometre-high tower will be an eyesore. But Davey said locals have no problem with it being there.

"It will be a major destination icon and a major tourist icon," he said.

It is estimated the energy output – which could fuel a small regional city – will represent an annual saving of 830,000 tonnes of greenhouse carbon dioxide gases that would have entered the environment. The long-term plan, said Davey, is to have five similar plants in Australia on the go by 2010.

Australia did not sign onto the Kyoto Accord, an agreement that says countries must substantially cut greenhouse gas emissions by 2010.

• BACKGROUNDER: Kyoto Protocol

Instead, they implemented their own renewable energy program, based primarily on renewable energy certificates. Companies that produce green power are given certificates to sell to companies that don't produce green power, as a penalty. Davey called Australia "world leaders" in this system, which is now being adopted in Europe.

By 2010, Enviromission hopes its solar-powered towers will produce over 30 per cent of the legislated need for renewable energy in Australia.