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.
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.”
