An aerial view of the existing Sherco Solar facility.
Xcel Energy plans to build the largest battery energy storage site in the Midwest at the Sherco Energy Hub in central Minnesota. This follows Xcel’s proposal to build out a battery storage network across Minnesota, optimizing the state’s energy grid and helping the company meet the growing electricity needs of the communities it serves.
“We are making significant investments 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 help us store energy when it’s cheap to produce and transmit when needed, allowing us to continue providing reliable electricity to customers and keeping bills low.”
The proposal, submitted to the Minnesota Public Utilities Commission on Oct. 31, would:
- Double the amount of battery storage next to the Sherco coal-fired power plant in Becker, which is expected to be decommissioned by the end of 2030. The Commission previously approved 300 MW of storage. The new proposal increases capacity to 600 MW.
- Add 135.5 MW of battery storage to the company’s Blue Lake facility in Shakopee.
- Expand the business Sherco Solar facility with an additional 200 MW solar array in Clear Lake Township.
If approved, the company plans to begin construction of the battery storage projects in 2026, with the batteries serving customers by the end of 2027. The projects will use lithium iron phosphate (LFP) battery cell technology, which has a strong track record of reliability and safety. LFP batteries discharge their energy in four-hour increments and can be recharged quickly, allowing for regular use.
The batteries will reuse existing grid connections, allowing Xcel Energy to store the energy produced in the Upper Midwest system at its wind, solar, nuclear and natural gas facilities and release it during periods of high demand.
“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 center: driving poles for solar panels, planting pollinator habitat and building battery storage pads,” said Joel Smith, president and business manager of the Laborers’ International Union of North America – Minnesota and North Dakota. “In our work with Xcel Energy, we are meeting Minnesota’s climate goals while supporting local workers and communities.”
Xcel Energy expects the projects will qualify for federal tax credits (offsetting 30% of the costs for the Blue Lake battery and 40% for the Sherco battery projects and Sherco Solar, which are located in an energy community). The company passes these tax credits directly to customers in the form of lower invoices.
Sherco Solar
Sherco Solar is the Upper Midwest’s largest solar generating facility. It has since had a strong track record of delivering carbon-free electricity to customers Commissioned in 2024. The first two phases are already online, a third phase is under construction and is expected to start producing electricity for customers in 2026.
Xcel Energy’s proposal to add a fourth phase to Sherco Solar would bring the facility’s total generating capacity to 910 MW by 2029. The expansion will create an estimated 300 union construction jobs and generate $90 million in local economic benefits.
News item from Xcel Energy
