Xcel Energy reaches Upper Midwest Energy Plan agreement with stakeholders

Xcel Energy Oct. 3 reached an agreement with several stakeholders that will help the company exceed 80 percent carbon emissions reductions by 2030 and ensure increased reliability.

“This plan invests in innovation that maximizes value for customers, creates jobs, and supports the communities we serve,” said Ryan Long, president of Xcel Energy-Minnesota, South Dakota, and North Dakota. “We’re making great progress toward our vision for reliable, affordable, 100 percent carbon-free electricity, and we appreciate the support of our stakeholders on an agreement that allows us to keep building the clean energy economy of the future.”

Xcel Energy reached the agreement with the Minnesota Department of Commerce, clean energy organizations, labor unions, and energy developers. The public will have an opportunity to provide comments through the Minnesota Public Utilities Commission (PUC) process, and a final decision is expected in early 2025.

The agreement includes adding 3,200 megawatts (MW) of wind energy by 2030, connecting to the Upper Midwest grid at the Sherco plant site in Becker, Minn., using the proposed Minnesota Energy Connection transmission line.

It also includes adding 400 MW of solar energy by 2030, connecting to the grid at the A.S. King plant site in Oak Park Heights, Minn., and adding another 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.

The agreement will also extend the use of Xcel Energy’s two carbon-free nuclear plants at Prairie Island and Monticello through the early 2050s. The company will also build a hydrogen-capable natural gas-fired power plant in Lyon County, Minn., 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.

At the same time, Xcel also made a commitment to continue development of a thermal heat battery pilot and bring a proposal to the Minnesota PUC in 2025, the company said.

Under the agreement, Xcel Energy’s Upper Midwest Energy Plan — under which carbon emissions reductions from 2005 levels are expected to exceed 80 percent by 2030 — could potentially reach up to 88 percent, said the company.

By continuing the operation of Xcel Energy’s nuclear plants, customers will benefit from the affordable, always-available, carbon-free electricity the plants generate, and the agreement will keep costs low for customers by unlocking tax credit savings from the Inflation Reduction Act for renewable generation and energy storage, the company said.

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

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