Xcel Energy gains approval for natural gas plant in southwest Minnesota
Xcel Energy will start constructing a new natural gas peaking plant this summer to support grid reliability, delivering service to customers when renewable energy in southwest Minnesota isn’t available and at times of peak demand, after receiving approvals this week from the Minnesota Public Utilities Commission.
The 420-megawatt Lyon County Generating Station, to be located near Garvin in Lyon County, will play a critical role in supplying reliable power to the grid during periods when wind and solar energy are not available and when the hottest and coldest temperatures of the year drive energy use up. Peaking plants do not continuously generate energy at full capacity; instead, they operate for a small portion of the year based on the needs of the grid. The energy they provide supports Xcel Energy’s larger plan to retire its remaining coal plants by the end of 2030 while keeping the grid reliable.
“As we end our use of coal, we’re bringing gigawatts of new renewables online in southwest Minnesota to serve our customers with clean, cost-effective energy,” said Bria Shea, president of Xcel Energy–Minnesota, North Dakota and South Dakota. “The Lyon County Generating Station will complement this new wind and solar with always-available energy to meet the needs of our customers when demand is highest.”
The Lyon County Generating Station will also provide grid stability for the upcoming Minnesota Energy Connection transmission line, which will connect up to 4,000 megawatts of new wind and solar in southwest Minnesota to the existing electric grid at the Sherco Energy Hub in Becker, Minnesota. The transmission line will deliver enough energy to power more than 1 million homes in the region and across the Upper Midwest. The Lyon County plant will be located next to the Garvin Substation, which will serve as the southern endpoint of the transmission line.
The natural gas plant will represent a significant investment in southwest Minnesota and the regional electric system, including an estimated $300 million in property taxes over the life of the plant. When combined with the new Minnesota Energy Connection transmission line and the planned renewable energy projects, the projects represent a significant investment in the region and will bring hundreds of construction jobs.
Construction on the Lyon County Generating Station will begin late this summer and the facility will start operating in late 2028. Xcel Energy will continue to work closely with neighboring landowners, local officials and other stakeholders as the project is developed.
