Xcel Energy plans 600MW ‘US Midwest’s largest BESS project’ in Minnesota

LinkedIn
Twitter
Reddit
Facebook
Email

US utility Xcel Energy plans to build the Midwest’s largest battery energy system (BESS) facility at the Sherco Energy Hub in central Minnesota, US.

The utility filed its proposal with the Minnesota Public Utilities Commission (MPUC) on 31 October.

If approved, Xcel says it would double the amount of battery storage adjacent to the Sherco coal plant in Becker, which is set to retire by the end of 2030.

The MPUC previously approved 300MW of storage, and the new proposal raises the capacity to 600MW.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

Additionally, Xcel states the proposal would add 135.5MW of battery storage at the company’s Blue Lake facility in Shakopee and expand the company’s Sherco Solar facility with an additional 200MW solar array in Clear Lake Township.

This would bring the total BESS deployed to 735.5MW. The company would begin construction on the BESS projects in 2026, aiming to be operational by late 2027. The projects will use lithium iron phosphate (LFP) battery cell technology.

The batteries will utilise 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 times of high demand.

According to Xcel, the Sherco battery projects are expected to generate over 150 union construction jobs and approximately US$200 million in local tax revenue.

Additionally, the Blue Lake project is projected to create around 55 construction jobs and contribute US$60 million in local taxes.

Xcel Energy anticipates that the projects will qualify for federal tax credits, 30% for the Blue Lake battery, 40% for the Sherco battery and solar projects.

The company claims it passes these tax credits directly to customers as reduced bills.

Xcel Energy’s plan to expand Sherco Solar with a fourth phase will increase its total capacity to 910MW by 2029. This expansion is projected to generate approximately 300 union construction jobs and bring about US $90 million in local economic benefits.

Sherco Solar, launched in 2024, is the largest solar power plant in the Upper Midwest. The first two phases are already operational, with a third phase under construction that aims to begin supplying electricity to customers in 2026.

Earlier in October, Xcel proposed building out a 200MW network of distributed battery storage across Minnesota.

Under its ‘Capacity*Connect’ proposal, Xcel Energy aims to install up to 200MW of small-scale battery storage across Minnesota by 2028, networked and aggregated as a virtual power plant (VPP) to operate as a front-of-the-meter (FTM) resource.

Partnering with Sparkfund, Xcel explains that these distributed energy resources will help meet increasing electricity demand, provide reliable service, optimise existing infrastructure, and boost local employment.

When this plan was announced, John Farrell, Co-Director of The Institute for Local Self-Reliance (ILSR), noted in a post on social media networking site LinkedIn:

“Xcel’s programme would monopolise ownership of a battery storage program that seems to approach distributed batteries as a ‘small chunks of a utility-scale battery’ strategy, focused solely on transmission system benefits.”

8 September 2026
Barcelona, Spain
Battery & Energy Storage Tech Europe (BESTE) is Europe’s industrial scaling platform for stationary and industrial battery applications — not EVs. Taking place 8–9 September 2026 at Fira de Barcelona, BESTE brings together utilities, IPPs, energy-intensive industries, data centres, ports, rail, maritime, defence and aerospace OEMs — all deploying or integrating battery storage at scale. Over 100 companies already confirmed — including EDP Renewables, Acciona, Endesa, Naturgy, Neoen, Galp, Basquevolt and Veolia — alongside 40+ expert speakers and international institutional support from BEPA, BVES, LDES and Volta Foundation. Where Europe’s battery & ES ecosystem turns projects into reality.
15 September 2026
San Diego, USA
You can expect to meet and network with all the key industry players again in 2025 from major US asset owners, operators, RTOs and ISOs, optimizers, software and analytics providers, technical consultancies, O&M technology providers and more.
15 September 2026
Berlin, Germany
Launching September 2026 in Berlin, Energy Storage Summit Germany is a new standalone event dedicated to Germany’s energy storage market. Bringing together investors, developers, policymakers, TSOs, manufacturers and optimisation specialists, the Summit explores the regulatory shifts, revenue models, financing strategies and technology innovations shaping large-scale deployment. With Germany targeting 80% renewables by 2030, it offers a focused platform to connect with the decision-makers driving the Energiewende and the future of utility-scale storage.

Read Next

Premium
July 13, 2026
Energy-Storage.news Premium catches up with Giovanni Damato, US president of organic flow battery company CMBlu Energy about the company’s recent activity.
July 13, 2026
Australia’s AEMC is consulting on minimum system load in the NEM, with battery energy storage investment at the heart of the debate.
July 10, 2026
Peak Energy, ESS Tech Inc, and Unigrid have made recent announcements advancing sodium-ion energy storage technology in the US and Europe.
July 10, 2026
A 19.8MWh battery energy storage system (BESS) is to be added to an existing solar-plus-storage facility in the Republic of Palau, with Australian development finance backing the expansion of one of the Western Pacific’s flagship hybrid renewable energy projects.
July 10, 2026
HMC Capital has launched Illuma Energy, a new identity that brings together the ASX-listed asset manager’s energy investment, development and operating activities under a single platform.