Department of Energy Awards Xcel Energy Up to $70 Million for Long Duration Energy Storage at Sherco Plant

(KNSI) — Xcel Energy says it has received a grant of up to $70 million from the U.S. Department of Energy to provide funding for two long-duration energy storage systems.

The two will each boast a capacity of 10 megawatts and 1,000 megawatt-hours and be powered by iron-air batteries developed by Massachusetts-based Form Energy. These batteries will be placed at the sites of two retiring Xcel Energy coal plants: the Sherburne County Generating Station in Becker, Minnesota, and the Comanche Generating Station in Pueblo, Colorado.

Once operational, these systems will enable Xcel Energy to store surplus renewable energy, such as solar and wind power, for distribution during lower renewable energy production periods.

One of the standout features of Form Energy’s iron-air batteries is their ability to deliver electricity for up to 100 hours, a significant advancement compared to existing battery technologies, which typically provide fewer than eight hours of energy storage. These long-duration energy storage systems will enhance grid reliability by mitigating day-to-day and week-to-week fluctuations in renewable energy production.

U.S. Secretary of Energy Jennifer M. Granholm praised the project as a broader strategy to bolster the nation’s energy infrastructure. “As we build our clean energy future, reliable energy storage systems will play a key role in protecting communities by providing dependable sources of electricity when and where it’s needed most, particularly in the aftermath of extreme weather events or natural disasters,” said Secretary Granholm. “Thanks to President Biden’s Investing in America agenda, DOE is supporting game-changing energy storage projects across the nation-laying the foundation for the innovative solutions we need to ensure stronger, more resilient communities.”

In addition to the DOE funding, Xcel Energy secured a $20 million grant commitment from the Breakthrough Energy Catalyst fund earlier this year. This funding, dedicated to emerging climate technologies that reduce emissions and accelerate the clean energy transition, will contribute $10 million each to the Minnesota and Colorado battery systems, subject to specific funding conditions. Xcel Energy is also planning to leverage provisions in the federal Inflation Reduction Act, including standalone storage tax credits, to further reduce the cost of implementing the iron-air batteries.

The project in Minnesota has already received approval from the Minnesota Public Utilities Commission, with construction set to start next spring near one of the largest solar developments in the U.S., the upcoming 710 megawatt Sherco Solar installation.

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