Xcel Energy, a prominent energy provider in the United States, has received approval from the Minnesota Public Utilities Commission (PUC) for the expansion of the Sherco Solar project. This development is set to make the Sherco Solar project one of the largest solar projects in the country while supporting Xcel Energy’s commitment to transitioning to clean energy sources. By 2028, the company aims to triple the amount of solar energy on its Upper Midwest system.

The recent unanimous vote by the PUC opens the pathway for the installation of 710 MW of solar generation near the existing Sherco coal plant in Becker, Minn. This expansion includes adding a 250 MW array to the existing 460 MW under construction. Completing all phases of the project by the end of 2025 will replace the capacity of the first coal unit at the Sherco plant, which is scheduled for retirement later this year.

Xcel Energy’s solar portfolio, as approved by the commission, also involves purchasing power from the 100 MW Apple River solar project in northwestern Wisconsin. This project is expected to become one of the largest solar initiatives in Wisconsin.

Once complete, Sherco Solar’s impressive 710 MW capacity will generate enough electricity to power over 150,000 homes annually across Xcel Energy’s Upper Midwest system. Solar energy boasts the advantage of having no fuel costs and contributes to a diversified energy mix, which protects against fluctuating fuel prices. Furthermore, Xcel Energy anticipates qualifying for federal tax credits from the Inflation Reduction Act, which will ultimately result in cost savings for customers.

This expansion represents an additional investment of $406 million from Xcel Energy, bringing the company’s total investment in the Sherco Solar project to over $1 billion. Last fall, the PUC approved the initial phases of the project, and construction commenced in late April.

With the Sherco Solar arrays being built adjacent to the existing Sherco plant, Xcel Energy can efficiently reap the benefits of the facility’s existing grid connections. This approach ensures customers receive power in the most cost-effective and efficient manner possible.

The project plays a crucial role in meeting Xcel Energy customers’ energy needs as the company transitions away from coal. Xcel Energy aims to retire all of its coal units by the end of 2030. Consistent with its previous transitions of Minnesota coal plants, the company is committed to facilitating a seamless transition for employees at the Sherco plant without any layoffs.

Aside from the environmental benefits, the Sherco Solar expansion holds significant economic advantages for Becker and the surrounding areas. The project is expected to provide nearly 400 union construction jobs. Additionally, Xcel Energy’s Power Up workforce and development program will be employed, emphasizing the integration of women and individuals from underrepresented communities in the utility industry and building trades.

National Grid Renewables is currently developing the Apple River solar project, and Xcel Energy has secured a 20-year agreement to purchase power from this initiative. The project is set to create approximately 150 union construction jobs, with landowners and local governments receiving $19 million and $4 million, respectively, over the course of the agreement.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The energy market is highly volatile, and readers should conduct thorough research before making any investment decisions.