Xcel Energy (NASDA: XCEL) has revealed plans to construct the Upper Midwest’s largest battery energy storage site at the Sherco Energy Hub in Becker, Minnesota. This initiative is part of a broader effort to invest in clean energy solutions across the region.
“We’re making a significant investment in battery storage because we see it as a critical part of Minnesota’s energy future,” said Bria Shea, president of Xcel Energy-Minnesota, North Dakota, and South Dakota. “Batteries allow us to store energy when it’s inexpensive to produce and dispatch it when needed, ensuring reliable electricity for customers while keeping costs low.”
The proposal, submitted to the Minnesota Public Utilities Commission, outlines several key projects:
- Doubling Sherco Battery Storage: The plan would expand battery storage capacity at the Sherco coal plant site from 300 MW to 600 MW. The coal plant is set to retire by 2030.
- Enhancing Blue Lake Facility: An additional 135.5 MW of battery storage would be added at the Blue Lake facility in Shakopee.
- Expanding Sherco Solar: A new 200-MW solar array would be added to the Sherco Solar facility in Clear Lake Township.
If approved, construction on the battery storage projects would begin in 2026, with operations expected by late 2027. The projects will utilize lithium iron phosphate (LFP) battery technology, known for its reliability, safety, and ability to discharge energy in four-hour increments with quick recharge times.
The batteries will integrate with existing grid connections, enabling Xcel Energy to store energy generated from its wind, solar, nuclear, and natural gas facilities across the Upper Midwest. This stored energy can then be released during peak demand periods, improving grid reliability.
“For half a century, LIUNA members have kept the lights on in Minnesota by building and maintaining Sherco coal units. Today, we’re proud to transform the plant into a clean energy hub—pounding posts for solar panels, planting pollinator habitat, and constructing pads for battery storage,” said Joel Smith, president and business manager of the Laborers’ International Union of North America—Minnesota and North Dakota. “Together with Xcel Energy, we’re meeting Minnesota’s climate goals while supporting local workers and communities.”
The projects are expected to qualify for federal tax credits, potentially offsetting 30% of the cost for the Blue Lake battery and 40% for the Sherco battery and solar projects. Xcel Energy plans to pass these savings on to customers through lower bills.
Additionally, the proposal includes a fourth phase for the Sherco Solar facility, which would increase its total generating capacity to 910 MW by 2029. Already the largest solar generating facility in the Upper Midwest, Sherco Solar began operations in 2024, with its first two phases online and a third phase set to launch in 2026.
These initiatives mark a significant step in Xcel Energy’s transition from coal to clean energy, reinforcing its commitment to sustainability and economic growth in central Minnesota.
For more information about Xcel Energy please visit my.excelenergy.com.
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