Xcel Energy's plan to install a battery storage system in central Minnesota is getting a financial boost.
Earlier this year, Xcel announced plans to partner with Massachusetts-based Form Energy to install iron-air battery systems at two retiring coal plants in Becker, Minn. and Pueblo, Colo.
Now, Breakthrough Energy Catalyst has agreed to commit $20 million in grant funding for the projects. The funding platform, part of a company started by Microsoft co-founder Bill Gates, invests in emerging technologies to reduce greenhouse gas emissions.
The battery systems will allow Xcel to store renewable energy when it is produced, then distribute it later, when the sun isn't shining or the wind isn't blowing.
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“Innovative long-duration energy storage technologies are crucial to achieving 100 percent carbon-free electricity,” said Bob Frenzel, Xcel’s chairman, president and CEO, in a news release.
The iron-air batteries developed by Form Energy store electricity for about four days, much longer than a lithium battery. Xcel said the battery systems will strengthen the electric grid against normal weather variability and extreme events such as a polar vortex.
New solar plant at Becker
Interest in battery storage is surging as electric utilities retire baseload power plants that burn coal or gas, and add more wind and solar.
Earlier this year, state lawmakers passed a bill setting a 2040 deadline for Minnesota’s electric utilities to transition to carbon-free sources of power. Gov. Tim Walz signed the bill into law in February.
Xcel plans to retire all three coal-burning units at the Sherco plant in Becker by 2030. This spring, the Minneapolis-based utility is starting construction on a 460-megawatt solar project adjacent to the plant.
Xcel said it also plans to use renewable energy tax credits in the federal Inflation Reduction Act to reduce the cost of the iron-air batteries. The company expects to have the storage systems online in 2025, subject to approval by state regulators.
Great River Energy also plans to install an iron-air battery system next to its natural gas peaking plant in Cambridge, about 45 miles north of the Twin Cities, sometime next year.