Xcel Energy is making a first-of-its-kind proposal to build out a battery storage network across Minnesota, optimizing the state’s energy grid and helping the company meet the growing electricity needs of the communities it serves.
Under its Capacity Connect proposal
Xcel Energy will install up to 200 megawatts of battery storage resources at strategic locations on the grid by 2028. Deployed in collaboration with Sparkfund, the distributed energy resources will help meet increasing demand for electricity, maintain reliable service for customers, maximize the efficiency of existing infrastructure, and support local jobs.
“We’re focused on supporting economic growth and the needs of our communities by building out and modernizing our energy grid,” said Ryan Long, president of Xcel Energy-Minnesota, North Dakota and South Dakota. “We believe distributed energy resources are an important part of that strategy. They will complement our current plans for additional renewable and firm dispatchable generating resources to meet our customers’ needs.”
Xcel Energy’s approach takes advantage of its integrated system planning processes to determine the best customer locations to install the new battery storage resources. The company will integrate the battery storage into its system operations, charging the batteries during times when energy is inexpensive and dispatching that energy to serve all customers during periods of peak demand.
“By storing energy when it’s cheap, delivering it when it’s needed most and placing assets where they maximize grid value, Xcel Energy is delivering reliable energy to customers today and building a grid that is ready for tomorrow,” said Pier LaFarge, CEO of Sparkfund. “Sparkfund will help Xcel Energy deploy distributed energy resources to meet growing customer energy needs, support economic growth in Minnesota and unlock the full value of the U.S. electric grid.”
Battery storage is an important part of Minnesota’s energy future. Xcel Energy’s recently approved Upper Midwest Energy Plan calls for the installation of 600 megawatts of energy storage by the end of 2030. The proposed distributed capacity procurement will help achieve that goal, and Xcel Energy is bringing it forward to the Minnesota Public Utilities Commission with the encouragement of many stakeholders.
Xcel Energy intends to locate the batteries at local businesses, commercial or industrial sites, or nonprofit organizations. This provides more customers—including those in environmental justice communities—with an opportunity to benefit financially from hosting clean energy technologies. Hosts would receive direct payments for participating in the program. Each site will have approximately one to three megawatts of storage (one megawatt is about the size of a shipping container).
Xcel Energy, in collaboration with Sparkfund, will scale the deployment so the grid can keep pace with increasing demand while prioritizing local workers and complying with the company’s labor standards. Xcel Energy will operate each battery storage asset to maintain the safety and security of the system.
With this novel approach
Xcel Energy and Sparkfund will closely review performance, costs, and customer experience as the program grows, ensuring this approach is cost-effective while supporting a clean, reliable and safe grid.
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