Vattenfall has announced it will invest €83.5 million (£64.2m) in a district heating project in Hamburg.
The money will be used to refurbish the Wedel combined heat and power plant (CHP).
The project aims to secure the city’s heat supply for “a few more years” and comply with environmental strandards.
Work on the turbines, boiler and control system of the plant will start in summer this year.
Tuomo Hatakka, Head of Business Area Heat said: “In parallel to the refurbishment of the plant in Wedel, Vattenfall is developing a concept to achieve climate neutrality in Hamburg heat operations by 2050.
“It could include heat storage, power-to-heat, industrial heat, decentral solutions and possibly gas-CHP that will replace the existing plant. The concept will be developed in close alignment with the City of Hamburg.”