The UK Department for Energy Security & Net Zero announced on Friday the 拢25bn project 鈥渄oes not clearly align strategically with the government鈥檚 mission to build homegrown power here in the UK鈥�.
The Xlinks Morocco-UK power project wanted to build solar and wind farms, together with a battery storage facility, in Morocco鈥檚 Guelmim Oued Noun region and connect it exclusively to the UK through HVDC sub-sea cables with a combined capacity of 3.6GW at the receiving end.
The 3,800km-long interconnector cable was to have come ashore near Bideford in North Devon, making it the world鈥檚 longest undersea power cable.
The project would have been capable of supplying up to 8% of Great Britain鈥檚 electricity needs, Xlinks claimed.
Energy minister Michael Shanks said: 鈥淴links approached government requesting support for the project, including a bilaterally negotiated 25-year contract for difference under section 10 of the Energy Act 2013, that would guarantee a set price per MWh of electricity supplied for the life of the contract.
鈥淎 team of officials within the Department for Energy Security & Net Zero has engaged with Xlinks closely to understand the details of the proposal and has been working across government to evaluate the viability and merits of the project. This evaluation has considered if and how the project could support the government鈥檚 strategic objectives and the risks which could impact the successful delivery of it.
鈥淭he government has concluded that it is not in the UK national interest at this time to continue further consideration of support for the Morocco-UK power project. The government has concluded the project does not clearly align strategically with the government鈥檚 mission to build homegrown power here in the UK.
鈥淭his would be a first of a kind mega project, which has a high level of inherent, cumulative risk (delivery, operational, and security). We acknowledge the excellent work of Xlinks on trying to mitigate these risks where possible but nevertheless, this remains a factor in decision-making.
鈥淯ltimately, we have determined there are stronger alternative options that we should focus our attention on to meet the government鈥檚 plans to decarbonise the power sector and accelerate to net zero at least risk to billpayers and taxpayers.
鈥淭he government also believes that domestic alternatives can see greater economic benefits whether that be through jobs or supply chains.鈥�
Xlinks chair Sir Dave Lewis responded: 鈥淲e 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.
鈥淲e developed this project to rapidly realise the potential of long-distance electricity generation and connection for the UK and Morocco 鈥� potential that was recognised by the UK in 2023, when it was designated as a nationally significant project.
鈥淭he project requires no upfront government investment and offered a highly competitive CfD strike price. It would reduce wholesale electricity prices by over 9% in its first year; bring in 拢20bn of socio-economic value, including a 拢5bn injection into the UK鈥檚 green industries; provide 8% of the UK鈥檚 electricity needs at a time when demand is rocketing; cut power sector CO2 emissions by c.10% in its first year; and increase energy security through increased diversity of supply and reduced reliance on imported gas.
鈥淔urthermore, it would address the challenge of sharp drops in UK power generation when the wind isn鈥檛 blowing or the sun isn鈥檛 shining. It would do this at significantly lower cost than the nuclear alternative and be connected to the grid much sooner.
鈥淭he international investment community identified the potential of the opportunity. Over 拢100m from leading energy sector players has already been spent on project development, and demand from lenders to participate in the construction phase is greater than we require.
鈥淢ost importantly, Morocco 鈥� a world leader in renewable energy 鈥� recognises the strategic value of interconnections. We have been continuously impressed by the vision, framework and environment that Morocco has put in place to foster international energy collaboration through supporting innovative initiatives, as part of its long-term vision to lead the international community鈥檚 efforts towards net zero.
鈥淯ltimately, we have no choice but to accept DESNZ鈥檚 decision. We are now working to unlock the potential of the project and maximise its value for all parties in a different way.鈥�
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