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Germany's Leipzig city to exit lignite-fired heating by 2022

London — The German city of Leipzig plans to invest Eur300 million ($330 million) in gas-fired generation, renewables and heat storage to exit lignite-fired heating supply by 2022, it said Monday.

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Some 80% of the city's heat demand is currently provided by the Lippendorf lignite-fired power plant.

"2022 would be the best possible year for this [a lignite exit] as it is technically feasible, economically reasonable and ecologically determined," city mayor Burkhard Jung said.

Permitting of new heating infrastructure could push the date back, he said.

Municipal utility Stadtwerke Leipzig plans to build 250 MW of generation capacity and 100 MW of storage capacity using a mix of technologies from gas to solar thermal, power-to-heat, biomass and waste, it said.

Plans include a gas-fired combined heat and power unit at Leipzig-Sued by 2022, with construction slated to start from third quarter of 2020. The project, which requires permits at city and state level, has already received pre-approval regarding subsidies meant for combined heat and power plants.

Lippendorf was in the headlines last week after part-owner EnBW said it had temporarily stopped one unit for economic reasons. The second unit at Lippendorf is operated by LEAG and continues to operate profitably, a spokesman for the Eastern German lignite operator said.

"It is therefore all the more important to tackle now a future-proof heating supply solution for Leipzig," the Leipzig mayor said, adding that the large number of individual projects to be implemented in parallel are expected to pose various challenges.

Germany's government plans to phase-out all of its coal-fired power plants by 2038 at the latest. Many cities such as Berlin, Hamburg and Munich have ambitious climate targets that are challenging to implement.

Last week, Munich had to abandon plans to close its coal-fired combined heat and power plant by 2022 after plans for replacement gas-fired heating units were rejected by residents. It plans to become Germany's first city to supply 100% renewable heat by 2040.

--Andreas Franke, andreas.franke@spglobal.com

--Edited by Kshitiz Goliya, kshitizgoliya@spglobal.com