Swedish utility company Vattenfall is investing almost 100 million euros ($112 million) to build a power-to-heat facility in the German capital.

Vattenfall says the 120-megawatt thermal energy facility in Berlin's western district of Spandau aims to use to provide heating to thousands of homes in the city of 3.5 million.

Berlin has long used a system known as district heating to pump water heated in coal and gas-fired power plants directly into households.

Germany is expanding the use of as part of its effort to drastically reduce over the coming decades.

The country already generates a large amount of electricity from wind power plants in the north of the country, some of which will now be used to heat Berlin homes.