UK rejects support for $33bn Moroccan subsea renewable energy link

The UK Government’s Department for Energy Security and Net Zero (DESNZ) has announced that it is currently not contemplating a contract for difference (CfD) for Xlinks’ £24bn ($33bn) Morocco-UK Power Project.

Xlinks had approached the government seeking support for the project, which includes a bilaterally negotiated 25-year CfD under Section 10 of the Energy Act 2013.

This contract would have ensured a fixed price per megawatt-hour (MWh) of electricity supplied for the duration of the agreement.

The UK Government stated that it is not in the national interest to pursue further consideration of support for the project.

The government believes domestic projects could provide greater economic advantages and support its plans to decarbonise the electricity sector by 2030.

Minister for Energy Under Secretary of State Michael Shanks said in a written statement to parliament: “Making Britain a clean energy superpower is one of the Prime Minister’s five defining missions of this Government. As part of this we have been considering the Xlinks Morocco-UK Power Project, a private sector led proposal, to supply clean power to Great Britain via sub-sea HVDC [high-voltage, direct current] cables.

“The government has concluded the project does not clearly align strategically with the government’s mission to build homegrown power here in the UK.

“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.”

Xlinks’ project involves the construction of 4,000km of HVDC subsea cables to supply electricity from the Tan-Tan province of Morocco to power seven million homes in the UK.

Xlinks chairman Dave Lewis expressed disappointment at the government’s decision, stating that the project did not require government investment and provided a highly competitive CfD.

Lewis said: “We are hugely surprised and bitterly disappointed that the UK Government would choose to walk away from an opportunity to unlock the substantial value that a large-scale renewable energy project like this would bring, not least the opportunity to lower the wholesale price of electricity, which is currently one of the highest in Europe.

“We developed this project to rapidly realise the potential of long-distance electricity generation and connection for the UK and Morocco – potential that was recognised by the UK in 2023, when it was designated as a Nationally Significant Project.

“Ultimately, we have no choice but to accept DESNZ’s decision. We are now working to unlock the potential of the project and maximise its value for all parties in a different way.”