Dive Brief:
- Xcel Energy filed a “first-of-its-kind proposal” with Minnesota regulators on Oct. 3 to develop a network of distributed battery resources across its grid and integrate the capacity into its system planning, beginning with an initial procurement of up to 200 MW.
- Under its Capacity*Connect proposal, Xcel will work with Sparkfund to deploy batteries ranging from 1-3 MW at “strategic locations” on its grid by 2028, paying local businesses, commercial or industrial sites, or nonprofit organizations to host the batteries.
- Xcel requested the Minnesota Public Utilities Commission approve the program with a budget range from $152 million, based on a minimum procurement of 50 MW, to $430 million if it deploys all 200 MW.
Dive Insight:
Xcel’s application outlines a program vision that provides capacity and energy benefits “without the need for potentially time-consuming and costly interconnection, upgrades, and investment in the bulk system while bringing more locally stacked benefits through optimization of the distribution system.”
The benefits won’t all be realized immediately, Xcel told regulators, “but we believe this proposal provides critical movement toward an energy future that optimizes the usage of all of our assets.” The Capacity*Connect program “represents a step-change” in how Xcel and other utilities are “beginning to incorporate distributed energy resources into system planning and operations,” it said.
“Our proposal is one of the first that integrates a network of distributed batteries into our system planning, aggregates their energy on our distribution system, and operates them to serve all customers,” utility spokesperson Theo Keith said in an email.
“We’re focused on supporting economic growth and the needs of our communities by building out and modernizing our energy grid,” Ryan Long, president of Xcel Energy-Minnesota, North Dakota and South Dakota, said in a statement. “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.”
Sparkfund is a deployment services company specializing in integrating distributed resources into utility grids. According to Xcel’s application, Sparkfund’s role in the project includes:
- Evaluating, selecting and securing battery sites, including marketing to potential hosts;
- Procurement of goods and services, including battery energy storage system equipment, with competitive vendor selection, contracting assistance and vendor management;
- Facilitating data flows “that enable both existing and emerging asset monetization streams”; and,
- Operations and maintenance of battery energy storage system assets for the life of the program.
“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,” Sparkfund CEO Pier LaFarge said in a statement.
Xcel Energy’s Upper Midwest Energy Plan calls for the installation of 600 MW of energy storage by the end of 2030. The plan was approved by the PUC in February.
