Cost of Xlinks Morocco-UK project balloons by a third

• Green energy plan could cost $30bn
• UK-based Xlinks cites ‘global events’
• Supply chain and interest rates costs

The cost of an ambitious project to deliver green energy from the south of Morocco to power homes in the UK has ballooned by more than a third to $30 billion.

Xlinks First is behind the Morocco-UK renewables project, which would construct the world’s longest high-voltage direct current (HVDC) subsea power cable between the North African country and the UK, with the aim of supplying 8 percent of the UK’s electricity needs.

Xlinks had originally planned to deliver the solar and wind-powered project for £18 billion ($22 billion), although this was revised last year to as much as £22 billion, with the company blaming supply chain costs, inflation and the exchange rate.

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James Humfrey, CEO of Xlinks, which has its headquarters in the UK, revealed this week that the cost has since increased further and could reach $30 billion.

In a statement, Xlinks referred again to the impact of global events on the supply chain, which accounted for about 60 percent of the change. Factors cited included market-wide increases in raw material and energy costs, as well as a global increase in demand for renewables.

The remaining 40 percent of the change related to “direct macroeconomic effects”, with interest rates responsible for the vast majority of that. 

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Humfrey said the impact would be minimal and the new price was “broadly in line” with the global market.

“We continue to make good progress in raising the private capital needed to deliver the project, as well as constructive dialogue with key stakeholders, including the UK’s Department for Energy Security and Net Zero,” he said.

Upon completion, Xlinks will generate 3.6GW of electric power, stored at a 5GW battery plant in Morocco.

Xlinks was contacted by AGBI but refused to comment further.

In April last year, Taqa, the UAE’s largest power producer, announced AED113 million ($31 million) in funding for the project.

TotalEnergies revealed in November that it had invested £20 million to acquire a minority stake in Xlinks.

The site of the Xlinks project in the Guelmim-Oued Noun region experiences 3,500 hours of sunshine a year, against 1,500 hours a year in the UK.

Xlinks previously said the project will create about 10,000 jobs in Morocco during its construction.

The first phase of the project is slated to go live in 2029, with the second phase due to follow in 2031.