UK Government Rejects CfD for 11.5GW Morocco-UK Xlinks Interconnector Project
Key Insights
The UK government declined to sign a Contract for Difference (CfD) for Xlinks' 11.5GW Morocco-UK interconnector, citing misalignment with domestic energy goals.
Officials concluded the project's risks, including delivery and security concerns, outweighed its potential benefits despite Xlinks' mitigation efforts.
The £18 billion project, featuring hybrid solar-wind farms and 5GW/22.5GWh battery storage in Morocco, aimed to deliver energy at £48/MWh.
Xlinks expressed disappointment, highlighting the lost opportunity for large-scale renewable energy integration and economic value.
The UK government has opted against signing a Contract for Difference (CfD) with Xlinks for the ambitious 11.5GW Morocco-UK interconnector project, citing misalignment with its strategy to prioritize homegrown energy infrastructure. The Department for Energy Security and Net Zero (DESNZ) reviewed the proposal but determined it did not meet national interests, particularly given the project's high inherent risks, including delivery, operational, and security challenges.
Energy Minister Michael Shanks emphasized the government's focus on domestic clean energy development, stating, "This would be a first-of-a-kind mega project with significant cumulative risks. While we acknowledge Xlinks' efforts to mitigate these, the risks remain a decisive factor." The decision follows the recent release of the UK's Industrial Strategy, which underscores building a "clean energy revolution in Britain."
The Xlinks project, unveiled in 2021, proposed a 4,000km subsea HVDC cable network connecting Morocco's Guelmim Oued Noun region—home to a hybrid solar-wind farm and a 5GW/22.5GWh battery storage facility—to the UK. The £18 billion initiative aimed to deliver renewable energy at £48/MWh (US$65.9/MWh), backed by investors like TAQA and Octopus Energy.
Xlinks Chair Sir Dave Lewis expressed dismay, calling the decision a missed opportunity for large-scale renewable integration and economic benefits. The rejection raises questions about the feasibility of similar international renewable projects in the UK's energy transition strategy.