Xcel Energy has proposed an ambitious plan to the Minnesota regulatory authority to develop the biggest battery energy storage system in the Upper Midwest region of the US. The firm made the filings with the Minnesota Public Utilities Commission on October 31, with the company seeking approval for the doubling of the existing battery storage facilities at its Sherco coal-fired station to 600 MW. The ambitious plan is part of the firm’s focus on renewable energy investment, due to the closure of the coal-fired station by 2030.
How the Sherco site transforms from coal to clean energy
The proposed battery project will tap into existing connections with the Sherco coal-fired electric generation plant in Becker, MN, scheduled for closure by the end of 2030. Xcel Energy had previously received approval to build 300 MW of battery storage at the same site, but the proposed plan will double the size to 600 MW. The repurposing of existing assets helps the company effectively reduce construction expenses while minimizing the negative impact on the environment through the efficient transition process.
The battery system will utilize lithium iron phosphate technology, which is designed to be able to discharge energy in four-hour bursts with rapid recharge capabilities, suitable for daily operation. The technology will enable the storage of energy generated by wind, solar, nuclear, and natural gas plants throughout the Xcel system in the upper Midwest region, allowing the energy generated to be dispatched from batteries in the event of peak hours, stabilizing the system while lowering costs for customers.
Why are extra facilities increasing the regional storage capacity?
Other than the Sherco expansion, the plan proposed by Xcel also involves the construction of an additional 135.5 MW battery facility at the company’s Blue Lake site located in Shakopee, in the state of Minnesota. The plan will result in the creation of 55 construction jobs, in addition to other benefits, with the inclusion of $60 million in local tax contributions to the community, according to estimates.
The plan also involves the expansion of the existing Sherco Solar complex with another 200 MW solar installation in Clear Lake Township. This will be the fourth stage of development, which will raise the collective Sherco Solar output to 910 MW by the year 2029, making the installation the biggest in the entire upper Midwest region. The solar installation will provide about 300 construction jobs, along with economic impacts of about $90 million.
Project economic impact
- 150+ union construction jobs at Sherco.
- $200 million in local tax revenue.
- 55 construction jobs at Blue Lake.
- $60 million in additional local taxes.
Why are additional facilities expanding regional storage capacity?
What is particularly noteworthy about the battery storage growth of Xcel Energy is the scope, but also the way in which the company is dovetailing its plans with the existing coal assets to deliver clean energy with the support of the existing network’s benefits on the economic front. This is the way in which the energy shift from fossil fuels to renewables needs to be achieved without causing disruption.
Xcel Energy’s president, Bria Shea, who is leading the company’s businesses in the state of Minnesota, the state of North Dakota, and the state of South Dakota, described the relevance of the investment made by the firm: “We are investing heavily in battery storage because we believe that battery storage is going to be an important part of the future of energy in the state of Minnesota.”
This integrated approach to the development of energy storage reflects the current trend in the energy industry towards the incorporation of large-scale batteries, which will be able to contribute towards the stability of the electrical grid while facilitating the integration of greater levels of renewable energy resources into the mix. Such an initiative puts the state of Minnesota at the forefront with regard to the issue of the clean energy transition.
