Xcel Energy’s ambitious plan to advance carbon reductions while continuing to deliver reliable energy and keeping customers’ bills low gained approval from the Minnesota Public Utilities Commission last week.
The company’s Upper Midwest Energy Plan includes significant 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 carbon-free nuclear plants. Under the approved plan, carbon emissions reductions from 2005 levels are expected to exceed 80% by 2030, potentially reaching up to 88%. Xcel Energy was the first electric provider in the U.S. to set a vision to deliver 100% carbon-free electricity and has committed to retiring all of its coal plants by 2030.
“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 will keep costs low for customers by unlocking federal tax credit savings for clean energy generation and energy storage. In addition, by continuing the operation of Xcel Energy’s nuclear plants, customers will benefit from the affordable, always-available, carbon-free electricity the plants generate.
The agreement includes:
• Adding 3,430 megawatts 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 megawatts of grid-scaled solar energy by 2030, connecting to the grid at the A.S. King plant site in Oak Park Heights, Minnesota;
• Adding 600 megawatts of battery energy storage by 2030, in addition to a 300-megawatt 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 carbon-free 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’s plan meets the needs of customers on its Upper Midwest electric system, which 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.
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 carefully reviewed the agreement and comments from the public before Thursday’s decision.
