Environmental Leadership
September 22, 2023
Xcel Energy to expand one of the nation’s biggest solar projects
Minnesota regulators support third solar array at Sherco project site
Yesterday, the Minnesota Public Utilities Commission approved Xcel Energy’s expansion of the Sherco Solar project, which will soon become one of the biggest solar projects in the country. The project is a key element of Xcel Energy’s clean energy transition and will help the company triple the amount of solar on its Upper Midwest system by 2028.
The unanimous vote paves the way for 710 megawatts of solar generation near the existing Sherco coal plant in Becker, Minnesota, by adding a 250-megawatt array to the 460 megawatts currently under construction. All phases of the project are expected to be complete by the end of 2025, replacing the capacity of the Sherco plant’s first coal unit that is scheduled to retire later this year.
The solar portfolio approved by the Commission also includes a plan to purchase power from the 100-megawatt Apple River solar project in northwestern Wisconsin, which will be one of the largest solar projects in Wisconsin.
“We thank the Commission, Minnesota Department of Commerce and labor partners for their support of our solar portfolio,” said Chris Clark, president, Xcel Energy - Minnesota, South Dakota, and North Dakota. “Sherco Solar will provide the lowest-cost solar on our Upper Midwest system, and these projects demonstrate our focus on clean energy without compromising affordability.”
Sherco Solar’s 710-megawatt capacity will generate enough electricity to power more than 150,000 homes a year on average across the company’s Upper Midwest system. Solar energy does not have any fuel costs and contributes to a diversified energy mix, which helps protect against rising fuel prices. Xcel Energy expects to qualify for federal tax credits from the Inflation Reduction Act on Sherco Solar’s energy production, helping customers save money.
The newly approved expansion represents an additional investment of $406 million from Xcel Energy, bringing the company’s total investment in the Sherco Solar project to more than $1 billion. Last fall, the PUC approved the initial phases of the project, and construction began in late April.
Affordable solar resources
Xcel Energy is building the Sherco Solar arrays adjacent to the existing Sherco plant, allowing the company to reuse the facility’s existing grid connections. That will provide customers with power in the most efficient and cost-effective way.
The projects will help meet Xcel Energy customers’ energy needs as the company transitions from coal. Xcel Energy is on track to reduce carbon emissions 85% from customers’ electricity in the Upper Midwest by 2030. The company plans to retire all of its coal units by the end of 2030.
Xcel Energy is committed to a smooth transition for its employees at the Sherco plant, who have played a vital role in powering the region for decades. The company has transitioned other Minnesota coal plants without layoffs, and the company expects to accomplish this again at the Sherco facility.
Commitment to local economy
The project will provide economic benefits in Becker and the surrounding area. Sherco Solar will provide nearly 400 union construction jobs. The project will use Xcel Energy’s Power Up workforce and development program, designed to integrate women and people of color who are underrepresented in the utility industry and building trades. The Public Utilities Commission and Minnesota Department of Employment and Economic Development were key in shaping the program.
The entire Sherco Solar project will create an estimated $350 million in local economic benefits through payments to landowners and local governments. The company is also working with the state and local communities to bring new jobs and investments to areas affected by the coal plant retirements.
Xcel Energy’s latest solar portfolio also includes a 20-year agreement to purchase power from the Apple River solar project being developed by National Grid Renewables in Polk County, Wisconsin. The Apple River project will create an estimated 150 union construction jobs, plus $19 million in payments to landowners and $4 million in payments to local governments over the 20 years of the agreement.
Xcel Energy selected the Apple River and Sherco Solar projects after a competitive bidding process, and the company plans to seek additional solar resources in the coming years.