UK government abandons Moroccan HVDC megaproject plan

The Xlinks Morocco-to-UK power project is an ambitious private sector-led proposal which aimed to supply clean power to the UK via the world’s longest subsea high voltage, direct current (HVDC) electricity cable.

Xlinks, chaired by former Tesco Chief Executive Sir David Lewis, had approached the UK government, requesting support for a bilaterally negotiated 25-year Contract for Difference (CfD) under section 10 of the Energy Act 2013, that would guarantee a set subsidised price/MWh of electricity for the life of the contract.

A DESNZ team had been working closely with Xlinks to evaluate the viability of the project, which could potentially support the government’s Clean Power Plan. However, Energy Secretary Ed Miliband’s department has concluded that ‘the project does not align strategically with the government’s mission to build homegrown power here in the UK’.

Furthermore, there were concerns that this ‘first of a kind megaproject’ carried ‘a high level of inherent, cumulative risk in terms of delivery, operational [risk] and security of supply’. Miliband’s team acknowledged ‘the excellent work of Xlinks on trying to mitigate these risks where possible,’ but added that, ‘nevertheless, this remains a factor in decision-making’.

The press statement concluded: ‘Ultimately we have determined there are stronger alternative options that we should focus our attention on to meet the government’s plans to decarbonise the power sector and accelerate to net zero at least risk to billpayers and taxpayers.’

The Xlinks Chair expressed ‘huge surprise and bitter disappointment at the decision of the government to walk away from an opportunity to unlock the substantial value that a large-scale renewable energy project like this would bring’.

Only two years ago (in 2023) the project was designated as a ‘nationally significant project’.  

Although there were some critics from the outset, the project managed to attract serious investors. Xlinks has already raised and spent about £100mn on its development, with investors including Abu Dhabi national energy company TAQA, the UK’s Octopus Energy Group, and France’s TotalEnergies, GE Vernova and AFC.

Xlinks planned to build a vast solar, wind and battery storage facility covering 1,500 sq miles in the Geulmim Oued Noun region of Morocco, laying HVDC cables from Morocco to Dorset through four subsea canyons. Xlinks claimed that the project could provide 3.6 GW of clean power for an average of 19–20 hours a day by the early 2030s, sufficient to supply power to seven million homes and meet 8% of Britain’s electricity needs. At the same time, wholesale electricity costs could be reduced by over 9% in the project’s first year, according to Xlinks, providing a £5bn injection to the UK supply chain.

The plan was put forward by entrepreneur Simon Morrish a few years ago, with an estimated cost of £16bn, which has since soared to £24bn according to some estimates. The contract price under the CfD also climbed from £48/MWh in 2022 to £70–80/MWh, akin to the Hinkley Point C nuclear plant, which was set at £92.5/MWh in 2012 prices.  

However, there were also concerns about the security of a major HVDC cable running from sub-Saharan Africa and passing through a 3,800 km subsea interconnector via Spain, France and Portugal to the UK, given current volatile geopolitics.

Apparently, the Xlinks team is continuing to explore whether it can finance the project by striking deals with various private companies. ‘We are now working to unlock the potential of the project and maximise its value for all parties in a different way,’ Lewis said.