Marrakech \u2013 The British government has decided to reject the major renewable energy project that would have imported solar and wind power from Morocco to the United Kingdom.<\/p>\n
According to Sky News, Energy Security and Net Zero Secretary Ed Miliband has chosen<\/a> not to proceed with formal negotiations with Xlinks, a privately owned company seeking a 25-year price guarantee agreement.<\/p>\n The \u00a325 billion project, chaired by former Tesco chief executive Sir Dave Lewis, promised to deliver enough renewable energy to meet nearly 10% of the UK\u2019s electricity demand.<\/p>\n The decision comes as a surprise to energy industry executives, as Xlinks had pledged to provide large quantities of power at approximately half the price of electricity generated by new nuclear power stations.<\/p>\n A Whitehall insider indicated that the government\u2019s decision was partly motivated by a desire to focus on \u201chomegrown\u201d energy supplies.<\/p>\n This position was reinforced when Miliband stressed<\/a> the government\u2019s \u201cpragmatic determination\u201d to free itself from fossil fuel market fluctuations through local, clean, and less expensive energy that the country can control.<\/p>\n Xlinks had been seeking to agree a 25-year contract for difference with the Department for Energy Security and Net Zero, which would have guaranteed a price for the power generated by the project.<\/p>\n The company was looking to secure its business model through this mechanism, also known as a \u201ccompensatory gap contract,\u201d particularly for financiers and funders.<\/p>\n The project involved the construction of a 4,000-kilometer cable between Morocco and the Devon coast. It aimed to provide 3.6 gigawatts of clean, on-demand energy from solar, wind, and battery installations in Morocco to the UK, reducing the UK\u2019s carbon emissions by 10% and lowering wholesale electricity prices by 9.3%.<\/p>\n Market-testing for the project\u2019s financing had been significantly oversubscribed, according to sources, with investors including Total, the French energy giant. The company had raised about \u00a3100 million in development funding so far.<\/p>\n In an interview with Sky News in 2022, Sir Dave said Xlinks enjoyed low geopolitical risk because of Britain\u2019s centuries-old trading relationship with Morocco and the north African country\u2019s ambitions<\/a> of growing the energy sector as a share of its exports.<\/p>\n \u201cThe Moroccan government has recognized that exporting green [energy] is a very important part of their economic plan going forward, so they have an export strategy,\u201d he said at the time.<\/p>\n \u201cThe Sahara desert is probably one of the best places in the world to generate renewable energy from\u2026 so you have a very long period of generation. And if you\u2019re capturing that energy and adding some battery storage, you can generate energy to cover a little bit more than 20 hours a day, which makes it a fantastic partner for the UK.\u201d<\/p>\n Sir Dave had also noted that modern high-voltage cables meant energy could be transported \u201cover very long distances with very, very few losses.\u201d He explained that the technology risks were relatively small, citing examples of much longer cable links being planned elsewhere in the world.<\/p>\n \u201cThe benefit here is that it\u2019s proven technology with a very committed reliable partner with a cost profile\u2026 that we will never [be able to] match in the UK,\u201d he added.<\/p>\n Earlier this year, Sir Dave told<\/a> The Sunday Telegraph that Xlinks would switch its focus to another country<\/a> if the UK government did not agree to support the project. The company is now expected to explore other commercial opportunities.<\/p>\n