The U.S. Department of Energy granted $70 million to Xcel Energy to help build clean energy storage batteries in Colorado and Minnesota, cementing the financing for groundbreaking technologies the state’s largest utility needs to meet greenhouse gas reduction goals.
Xcel also has $20 million in funding from the private investment fund Breakthrough Energy Catalyst for its first two iron-air battery arrays, with $10 million each for the Colorado and Minnesota projects. The Colorado iron-air battery, which could be as big as a football field, will go up on the grounds of the Comanche coal-fired power plant in Pueblo that will be retired by 2031.
Xcel said it also plans to use storage tax credits in the Inflation Reduction Act to help fund the iron-air batteries.
“As we explore cutting-edge technologies to accelerate our journey toward 100% carbon-free electricity, we are committed to also keep our services affordable for our customers,” said Bob Frenzel, chairman, president and CEO of Xcel Energy, in a statement. “The Department of Energy grant provides crucial financial support for projects that will provide reliable, low-cost renewable energy to the communities we serve.”
A prime advantage of the iron-air storage technology is that it can hold power for up to 100 hours, far more than other battery systems meant to smooth out fluctuating supply and demand from solar and wind farms on the evolving energy grid. Environmental groups want Xcel and other utilities to build as many battery systems as possible in order to lessen the need for backup natural gas generators to supply power at peak demand or when solar and wind sources are not optimal.
Colorado laws target 80% of state utility generation, previously the largest emitter of greenhouse gases that cause climate change, to come from clean, renewable sources by 2030.
Xcel recently filed a new clean energy plan to meet those state requirements, which will now be reviewed by the Public Utilities Commission.
The Xcel clean energy proposal would double the energy coming from renewable systems in Colorado, using $10 billion in available Inflation Reduction Act tax credits to help defray the $15 billion cost of the investments. To meet its goals, Xcel will have to deploy a number of large storage projects beyond the 10MW Comanche iron-air batteries — the utility has proposed a total of 1,170 MW of new storage capacity.