Climate law could shrink price of Sherco solar project

Xcel Energy’s plans to build a massive solar project next to its retiring Sherco coal-fired power plant in central Minnesota could get a boost from the climate and energy law recently passed by Congress.

Minnesota U.S. Senator Tina Smith toured the coal plant on Monday, along with state and labor union officials and Xcel leaders. 

From the roof of one of the coal-burning units slated to be shut down by 2030, they got a bird’s eye view of the sprawling farm fields surrounding the coal plant, where Xcel hopes to start building the solar project in earnest by next spring. 

Chris Clark, president of Xcel in Minnesota, North and South Dakota, said Xcel has had a long presence of producing power in the Becker community, and plans to continue doing so with the 460-megawatt Sherco solar project.

"We're excited to turn this into the state's biggest solar installation — one of the biggest in the country –— and to continue being an important energy presence on the system," Clark said.

Last Thursday, the Minnesota Public Utilities Commission approved site and route permits for the solar project and two transmission lines. The commission still needs to approve a plan for how Xcel can recover the project's costs.

Xcel officials praised Smith’s efforts to help pass the Inflation Reduction Act, which they say will help the solar project become reality. Clark said the tax credits included in the law are expected to reduce its price tag — initially estimated at $575 million — by about 20 percent.

There are also additional benefits in the law for locating a clean energy project at a retiring fossil fuel plant, Clark said. Xcel has said that it makes sense to put the solar project next to Sherco, because it can take advantage of the existing infrastructure to connect to the electrical grid.

Smith, a Democrat, said the Inflation and Reduction Act helps support the transition to clean energy by providing local jobs in communities such as Becker, where workers have helped power Minnesota for decades.

“We designed this bill so that it would create opportunities not just any place, but in the places where there have been good union jobs,” she said. “We don't want those jobs to go away. We want them to be a part of the transition.”

Kevin Prantis with Laborers’ International Union of North America, said the project will offer an opportunity for people to pursue new careers in clean energy with the help of training and apprenticeship programs.

“There’s no replacement for Sherco,” he said. “The best we can do is say if you've been helping maintain this coal plant, do you want to figure out how to start installing solar panels, how to start doing work on solar projects, and move into other areas of work.”

Xcel hopes to start major construction on the solar project next spring. It will be built in two phases, in 2023-24 and 2024-25.

Xcel says the Sherco solar project would help toward its goal of producing carbon-free electricity by 2050. It also plans to continue operating the Monticello nuclear plant until at least 2040.