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 approval last week from the Minnesota Public Utilities Commission.
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 with neighboring landowners, local officials and other stakeholders as the project is developed.
The 420-megawatt Lyon County Generating Station, to be located near Garvin, 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.
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. 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, Xcel said, 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 planned renewable energy projects, they represent a significant investment in the region and will bring hundreds of construction jobs.
