January 10, 2020 / 10:38 AM / 3 months ago

UPDATE 1-RWE can expect 2 bln euros in lignite compensation - sources

* Government could also fund early retirement - sources

* RWE shares hit highest level in more than 5 years (Adds details from sources, shares)

BERLIN, Jan 10 (Reuters) - German utility RWE can expect around 2 billion euros ($2.2 billion) in compensation over government orders to turn off lignite power stations with a capacity of 2.5 gigawatts by the end of 2022, government and industry sources said on Friday.

As part of the proposal, RWE could get an additional 700 million euros to pay for the early retirement of about 3,000 workers that would be affected by the shutdown, the sources said.

It is still unclear how a further 0.5 gigawatts of lignite capacity will be shut by the end of 2022, which was proposed by a government-appointed commission last year.

RWE declined to comment. Germany's Economy Ministry, which has the task of working out a solution with Germany's lignite plant operators was not immediately available for comment.

The utility's shares hit their highest levels since October 2014 on the news and traded 5% higher at 1032 GMT. German daily Rheinische Post had earlier reported the possible compensation payment. ($1 = 0.9012 euros) (Reporting by Markus Wacket, Christoph Steitz and Tom Kaeckenhoff; Editing by Michelle Martin)

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