Xcel Energy has announced retirement of one of its three coal units at the Sherburne County Generating Plant, or Sherco, with a goal to deliver 100% carbon-free electricity in Minnesota by 2040.
The company plans to retire Sherco’s remaining coal-fired units in 2026 and 2030. The plant site is central to Xcel Energy’s clean energy transition with investments in solar, battery storage and new transmission lines.
“Just as we’re taking a phased approach to decommissioning the coal units, we’re building replacement generation in phases to support clean, reliable and affordable energy for our customers,” said Ryan Long, president of Xcel Energy—Minnesota, South Dakota and North Dakota.
Currently, Xcel Energy is building a solar facility nearby the Sherco site in the Midwest. The under-construction, two phased Sherco Solar project totals 460 MW. Additionally, site permit approval is pending for a 250 MW solar array.
The combined 710 MW is expected to generate enough electricity to power more than 150,000 homes each year on average and fully replace the capacity of the retired coal-fired Unit 2 upon completion.
The company will also build a 10 MW, 100-hour battery storage facility at the Sherco site as a pilot project. The storage system, developed by Massachusetts-based Form Energy, will allow Xcel Energy to enhance reliability by storing wind and solar power to distribute during periods of lower renewable production.
The project received an award of up to $35 million from the U.S. Department of Energy and a $20 million grant commitment from the Breakthrough Energy Catalyst fund.
Xcel Energy is also proposing to build the Minnesota Energy Connection transmission line, which will link approximately 2,000 MW of low-cost wind and solar resources in southwest Minnesota to the grid. The company will make the project cost-effective for customers by reusing existing grid connections at Sherco.
Sherco Unit 2 will become a synchronous condenser, a piece of equipment managing system stability as renewable energy increases, providing reliable electricity for customers.
While Xcel Energy has transitioned other Minnesota coal plants without layoffs, it expects to achieve it at the Sherco facility too. The new energy investments at the Sherco plant site will provide economic benefits in Becker and the surrounding area:
• Sherco Solar: Nearly 400 union construction jobs, 18 ongoing operations and maintenance jobs, and an estimated $350 million in local economic benefits through payments to landowners and local governments.
• Battery storage: 15 to 20 union construction jobs.
• Minnesota Energy Connection: Many jobs to build the transmission line and new wind and solar resources, and an infrastructure investment of more than $1 billion for the region.
Moreover, the company is also working with the state and local communities to bring new jobs and investments to areas affected by coal plant retirements.