Minnesota ushers in first standalone energy storage project
After Spearmint Energy applied for two separate but similar 150 MW energy storage projects, one will break new ground while the other faces ongoing hurdles from local opposition.
August 22, 2025 Rachel Metea
 A battery energy storage system using lithium ion batteries from LG, at the Battery Energy Storage System, owned and operated by NREL for grid integration research at the National Wind Technology Center.
U.S. Department of Energy
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Minnesota regulators approved the state’s first standalone energy storage project, a 150 MW, 600 MWh installation that will solar and wind energy from nearby projects to discharge during periods of high demand.
Named “ Snowshoe BESS,” project owner and developer Spearmint Energy estimates the lithium-ion battery project will cost about $214 million, and $8.2 million a year in operating costs. Across the project’s lifetime, Spearmint said the project will cost nearly $457 million, which includes the project’s decommissioning.
The project’s interconnection request is in the MISO definitive planning phase, with a generation interconnection agreement expected in early 2026, according to the Minnesota Public Utilities Commission. Spearmint anticipates the project will become operational in late 2027.
Spearmint estimates the project will generate about $18,7000 per year in property tax revenue.
The project will sit on 27.2 acres of rural land, mostly cultivated herbaceous vegetation, in Olmsted County. The commerce department’s environmental assessment of the project said the loss of farmland to the project is negligible.
The project was modified from its original plans to require Spearmint, at its own expense, to 1) work with local governments and emergency responders on a detailed water main extension report; 2) develop a plan to acquire specialized emergency equipment; and 3) provide related training for first responders.
Unlike solar projects, which often use power purchase agreements (PPA) when selling the generated energy to offtakers, standalone battery energy storage projects are often better suited for the merchant market and other contracting structures due to their complex and dispatchable nature. As such, Spearmint said it anticipates entering into a tolling agreement with its affiliated merchant energy business or similar third-party market participant. Under a toll structure, the power stored by the Snowshoe BESS project will be offered to wholesale customers, including Minnesota utilities and cooperatives that have identified a need for additional energy and capacity, as well as corporate and industrial customers that have set renewable energy goals, Spearmint said.
Snowshoe BESS could potentially operate under a different revenue structure including fully or partially contracting with a utility for capacity, energy or ancillary services, Spearmint said. “For example,” Spearmint said, “Snowshoe BESS could be sold to a utility, in which event the utility could use the Project to manage its own electrical load, and an enforceable mechanism for the sale of the power stored by the facility may not be applicable for the Project to operate or sell its stored power.”
Commissioner John Tuma said Snowshoe BESS “represents a crucial evolution in our state’s energy infrastructure.”
While Minnesota has battery storage projects paired with other projects, the Snowshoe BESS project is the first project approved to stand on its own.
Spearmint submitted an application to the Minnesota Public Utilities Commission for a similar standalone battery storage project – also 150 MW – around the same time as the Snowshoe project. However, unlike the Snowshoe project, the Midwater energy storage project received significant pushback from the area’s residents.
Located in Freeborn County, the Midwater project led to more than 100 letters, petitions and community meetings held by residents who said they were concerned energy storage systems pose environmental hazards, fire risk and have low benefit for the community.
While leading a community meeting where residents expressed their concerns, resident Dan Minear presented concerns about having heavy metals near schools and freshwater sources and risks of fire, according to local newspaper Alberta Lea Tribune. Minear said many of the benefits, such as increased tax revenue and energy production, will not be significant enough to positively impact the local community.
According to Midwater’s permit application, the project would provide an estimated $19,700 in annual property taxes over a 30-year lease for a total of about $788,000. The township would receive approximately an estimated $2,400 annually over the course of the lease.
As with the Snowshoe project, the Midwater energy storage would also use lithium ion phosphate batteries due to their improved safety profile compared to batteries made from nickle manganese cobalt oxide (NMC), Spearmint said. Lithium ion batteries have a higher thermal runaway temperature, making them less prone to fire and more stable because they have a lower risk of thermal runaway.
In June, the commission ordered for a 10-person advisory task force to help it identify additional viable sites or routes near the substation, potential appropriate permit conditions for setbacks from residents, schools and commercial properties, and so forth.
As of April 2025, Miami-based Spearmint Energy had more than 20 energy storage projects totaling over 13 GWh of capacity under development across the U.S., according to Spearmint. One project is the Revolution energy storage project, which brought bold, jewel-toned flowers to energy storage systems in the Texas desert earlier this year in a collaboration with artist Sophie Moss.
Spearmint’s founder, president and CEO said he hoped the art installations “will bring attention to the importance of supporting the communities in which we live and operate.”
(Read: Art brings energy storage to life
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