Xcel Energy plans to build the Midwest’s largest battery energy storage site at the Sherco Energy Hub in central Minnesota. It wants to double the amount of battery storage adjacent to a coal plant from 300 megawatts of storage to 600 megawatts.
The proposal, filed with the Minnesota Public Utilities Commission, will:
• Double the amount of battery storage adjacent to the Sherco coal plant in Becker, which is scheduled to retire by the end of 2030. The Commission previously approved 300 megawatts of storage. The new proposal increases the capacity to 600 megawatts.
• Add 135.5 megawatts of battery storage at the company’s Blue Lake facility in Shakopee.
• Expand the company’s Sherco Solar facility with an additional 200-megawatt solar array in Clear Lake Township.
If approved, the company intends to start construction on the battery storage projects in 2026, with the batteries serving customers by late 2027. The projects will use lithium iron phosphate (LFP) battery cell technology, which has a strong track record for reliability and safety. LFP batteries discharge energy in four-hour increments and are quick to recharge, allowing for regular use.
The batteries will re-use existing grid connections, allowing Xcel Energy to store energy produced across its Upper Midwest system at its wind, solar, nuclear and natural gas facilities and release it during periods of high demand.
Xcel Energy expects the projects will qualify for federal tax credits (offsetting 30% of the cost for the Blue Lake battery and 40% for the Sherco battery projects and Sherco Solar, which are in an energy community). The company passes these tax credits directly to customers in the form of lower bills, it said.
Xcel Energy’s proposal to add a fourth phase to Sherco Solar would bring the facility’s total generating capacity to 910 megawatts by 2029.
Sherco Solar is the Upper Midwest’s largest solar generating facility. It went into service in 2024. The first two phases are already online, with a third phase under construction and scheduled to start producing electricity for customers in 2026.
