Xcel's plans in Becker would create one of largest solar plants in country - Star Tribune

Xcel's plans in Becker would create one of largest solar plants in country

Xcel Energy plans to build another large solar array in Becker, creating one of the largest solar power complexes in the country.

Xcel said Monday it will ask Minnesota utility regulators to add a 250-megawatt solar array to the 460-megawatt Sherco Solar project that is already approved. The plan is to complete the entire complex by the end of 2025.

"We are committed to moving the Sherco Solar project forward to deliver significant new clean energy to our customers and communities," Chris Clark, Xcel's president for Minnesota, said in a press statement. "These projects will be the lowest-cost solar on our Upper Midwest system and demonstrate our focus on clean energy without compromising affordability."

Still, Xcel acknowledged in a regulatory filing late Friday that costs for new solar farms — and clean energy projects generally — have been soaring.

Minneapolis-based Xcel also on Monday said it plans to buy power from a 100-megawatt solar project in Polk County, Wis., being developed by National Grid Renewables. Xcel would build and own the Sherco solar addition, as it will with the already-approved Sherco project.

The 710 megawatts of total solar power capacity at Sherco would help replace electricity lost from the retirement later this year of a 680-megawatt coal-fired generator in Becker. Of course, solar — while clean — is variable power, while coal power can be dispatched on demand.

The three big coal generators at Xcel's Sherco power station in Becker — which are big carbon dioxide emitters — are all expected to close by 2030.

Solar currently provides about 3% of Minnesota's electricity, and the majority of that comes from smaller solar arrays that are 5 megawatts or below. The largest "utility-scale" solar project currently is Xcel's array near North Branch.

But a buildout of large projects is on tap, and the biggest is Xcel's 460-megawatt Sherco project, which the Minnesota Public Utilities Commission (PUC) approved in September despite concerns about its price tag.

Originally slated to cost about $575 million, Xcel disclosed in October that due to inflationary pressures, the price is now expected to be $690 million. New tax subsidies created by a landmark 2022 federal clean energy law will effectively help cover cost increases for the project, Xcel has said.

Xcel didn't disclose the estimated cost of the new Sherco solar project in a filing Friday with the PUC.

However, the company noted a "constellation of factors" that have been driving up prices for solar projects. Those include: "ongoing supply chain constraints, high labor costs, and rising interest rates that increase borrowing costs," the filing said.

The massive trove of tax credits created by President Joe Biden's 2022 clean energy legislation has helped cover some of those cost increases.

But at the same time, the legislation has "further increased demand" for clean energy projects, "putting upward pressure on prices," Xcel said in the PUC filing.

Edison Energy's Q4 Renewables Market Report shows that median solar PPA (Power Purchase Agreement) prices in the U.S. overall were 48 percent higher in the fourth quarter of 2022 compared to one year prior, Xcel noted in the filing.

Construction began on the first phase of the 460-megawatt Sherco solar project last month. That project will create 300 construction jobs, while the 250-megawatt addition – if approved by the PUC – would produce another 90 trades jobs, according to Xcel.

The Sherco addition would create an estimated $110 million in payments to landowners and local taxes, in addition to an estimated $240 million in local economic benefits from the first two solar projects, Xcel said.

The combined Sherco solar projects would generate enough electricity to power more than 150,000 homes each year on average.

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