Xcel Energy has unveiled an ambitious plan to install up to 200 MW of battery storage resources across Minnesota by 2028, a first-of-its-kind proposal that could redefine how utilities manage energy demand and grid reliability. The Capacity*Connect initiative, announced on October 6, aims to strategically deploy distributed energy resources in collaboration with Sparkfund, a move that underscores the growing importance of energy storage in modernizing the grid.
The proposal is a direct response to the increasing electricity needs of Minnesota communities and a strategic effort to optimize the state’s energy infrastructure. “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.”
By integrating battery storage into its system operations, Xcel Energy plans to charge the batteries during periods of low energy costs and dispatch that energy during peak demand times. This approach not only enhances grid efficiency but also ensures reliable service for customers. “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.
The proposal aligns with Xcel Energy’s recently approved Upper Midwest Energy Plan, which calls for the installation of 600 MW of energy storage by the end of 2030. The Capacity*Connect initiative is expected to play a significant role in achieving this goal, with the support of various stakeholders. The batteries will be located at local businesses, commercial or industrial sites, or nonprofit organizations, providing financial benefits to hosts and expanding access to clean energy technologies, including in environmental justice communities.
Xcel Energy and Sparkfund will prioritize local workers and comply with the company’s labor standards during the deployment process. Each battery storage site will have about 1 MW to 3 MW of storage, roughly the size of a shipping container. The companies will closely monitor performance, costs, and customer experience to ensure the program remains cost-effective and supports a clean, reliable, and safe grid.
This innovative approach could set a precedent for other utilities looking to integrate distributed energy resources into their grid management strategies. As the energy sector continues to evolve, such initiatives may become increasingly common, driving further investment in energy storage and accelerating the transition to a more resilient and sustainable energy future.