With coal retirements looming, Xcel Energy goes all in on thousands of megawatts of new generation

Photo by ZHANG FENGSHENG on Unsplash

Xcel Energy has received approval from the Minnesota Public Utilities Commission to build thousands of megawatts (MW) of new generation, as part of the company’s plan to advance carbon reductions and retire and replace its coal plants by 2030.

The company’s Upper Midwest Energy Plan includes new investments in battery energy storage systems, wind and solar power, and a natural-gas fired power plant, while extending the lives of Xcel Energy’s two nuclear plants. Under the approved plan, carbon emissions reductions from 2005 levels are expected to exceed 80% by 2030, potentially reaching up to 88%, according to the utility.

Xcel Energy’s Upper Midwest electric system serves Minnesota, Wisconsin, North Dakota, South Dakota and Michigan. Electric use in the region is expected to grow “significantly” in the coming years from businesses expanding their operations, the adoption of electric vehicles, and the electrification of homes and businesses.

“Our plan positions us to advance our clean energy vision by adding wind and solar resources while reinforcing the reliability of the grid with battery storage and clean natural gas,” said Ryan Long, president of Xcel Energy—Minnesota, South Dakota and North Dakota. “By working together with the Commission and our stakeholders, we’ll meet the unprecedented growth in electricity demand in our region, invest in our communities, and maintain reliable and resilient service for our customers.”

The plan also intends to unlock federal tax credit savings for clean energy generation and energy storage.

The agreement includes:

• Adding 3,430 MW of wind energy by 2030, connecting to the Upper Midwest grid at the Sherco plant site in Becker, Minnesota using the proposed Minnesota Energy Connection transmission line.
• Adding 550 MW of grid-scaled solar energy by 2030, including generation connecting to the grid at the A.S. King plant site in Oak Park Heights, Minnesota.
• Adding 600 MW of battery energy storage by 2030, in addition to a 300-MW lithium-ion battery at the Sherco plant site, allowing the company to store low-cost wind and solar energy for when it’s needed.
• Extending the use of Xcel Energy’s two nuclear plants at Prairie Island and Monticello through the early 2050s.
• Building a hydrogen-capable natural gas-fired power plant in Lyon County, Minnesota, to back up renewables and supply power during critical times while also providing grid stability for the proposed Minnesota Energy Connection transmission line from the Sherco site to Lyon County.
• A commitment to continue development of a thermal heat battery pilot and bring a proposal to the Commission in 2025.

These proposed resources are in addition to projects that have already received approval from regulators.

Xcel Energy, the Minnesota Department of Commerce, clean energy organizations, labor unions, and energy developers reached an agreement on the company’s proposed plan in October 2024. The Public Utilities Commission reviewed the agreement and comments from the public before its decision.

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