Xcel Energy, headquartered Minneapolis, plans to build a 600 MW battery energy storage system at its Sherco Energy Hub in Becker, Minnesota.
According to the company, the proposed project will significantly increase the state’s energy storage capacity. The new plan includes doubling the battery capacity at the Sherco site in Becker from the previously approved 300MW to 600 MW. In addition, Xcel Energy plans to install a 135.5 MW battery system at its Blue Lake facility in Shakopee and add a 200 MW solar array to the Sherco Solar facility in Clear Lake Township.
“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 company intends to start construction on the battery storage projects in 2026, with the batteries serving customers by late 2027. The projects will use LFP batteries known for safety, reliability, and quick recharge within four-hour energy cycles. Using existing grid connections, Xcel Energy will store power from its wind, solar, nuclear, and natural gas facilities and supply it during peak demand.
The Sherco battery projects are expected to generate over 150 construction jobs and contribute around $200 million, while the Blue Lake project is projected to support approximately 55 construction jobs and add about $60 million in local tax revenue. The company expects the projects will qualify for federal tax credits, 30% for Blue Lake and 40% for ShercoEnergy Hub which helps to reduce overall project costs and customer bills.
“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.”
The company plans to add a fourth phase to the Sherco Solar project, increasing its total capacity to 910 MW by 2029. The facility, which started operating in 2024 and is the largest solar installation in the Upper Midwest, already has two active phases, with a third under construction and scheduled for completion in 2026. The expansion is expected to create about 300 construction jobs and generate an estimated $90 million in local economic benefits.
Company stated that these developments reflect continued progress toward Minnesota’s clean energy and reliability targets while supporting community development.