Xcel Energy announced plans to build the Upper Midwest’s largest battery energy storage site at the Sherco Energy Hub in central Minnesota, one of a series of investments that the company hopes to make in 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 help us store energy when it’s inexpensive to produce and dispatch it when needed, allowing us to continue delivering reliable electricity to customers while keeping bills low.”
The proposal, filed with the Minnesota Public Utilities Commission on Friday, would:
- 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 MW of storage. The new proposal increases the capacity to 600 MW.
- Add 135.5 MW of battery storage at the company’s Blue Lake facility in Shakopee.
- Expand the company’s Sherco Solar facility with an additional 200-MW 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 the utility argues 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.
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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.
“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, Laborers’ International Union of North America—Minnesota and North Dakota. “In our work with Xcel Energy, we’re meeting Minnesota’s climate goals while supporting local workers and communities.“
Xcel Energy expects the projects will qualify for federal tax credits, which could offset 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 said it would pass these tax credits to customers in the form of lower bills.
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. Sherco Solar is the Upper Midwest’s largest solar generating facility, and 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.
The latest proposals are among a series of investments Xcel Energy is making in central Minnesota as coal operations wind down.
