UK Cancels $34B Undersea Energy Cable Deal with North Africa

UK terminates $34B subsea cable energy agreement in North Africa

In an ambitious endeavor with the potential to reshape the energy landscape, the British clean energy company Xlinks sought to connect Morocco’s abundant renewable resources with the energy needs of the UK. Picture a network of high-voltage subsea cables stretching more than 3,800 kilometers from the Guelmim-Oued Noun region of Morocco all the way to Devon, in southwest England. This project was designed to generate enough electricity to power over 7 million UK homes—representing up to 8% of the nation’s energy requirements. It seems like a monumental step toward a sustainable future, doesn’t it?

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But as with many grand visions, the road has taken an unexpected turn. Before the project’s abrupt termination, it was projected to harness upwards of 10.5 gigawatts of solar and wind power, creating a reliable 3.6 gigawatts of baseload energy. All systems seemed to be go; essential environmental permits had been cleared, and construction was slated to commence as early as 2027. Who wouldn’t want to be part of such a transformative project?

To date, over £100 million (approximately $137 million) has been invested in development and feasibility studies, not to mention the significant interest from potential lenders eager to support the construction phase. But here’s where things get tricky. The absence of a government-backed contract for difference, which would ensure a minimum price for electricity, has cast a shadow over the project, making it seem less attractive to investors. Would you risk your money on an uncertain venture?

Michael Shanks, the UK Energy Minister, elaborated on this decision, explaining the government 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 rationale reflects a shift in focus—Before, it seemed that tapping into international resources would be the answer; now, there’s a growing inclination towards “homegrown power.” This pivot aligns with a broader energy security strategy aimed at increasing domestic renewable investments for enhanced economic and energy security.

A wave of disappointment swept through as news of the cancellation broke. Dave Lewis, Chairman of Xlinks, conveyed his feelings when he stated, “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.” Lewis’s passion for renewable energy resonates, doesn’t it? He went on to share that the company is now exploring alternative pathways to maximize the project’s value, suggesting a tenacity that is often rare in the face of setbacks.

At its core, the Morocco-UK Power Project was envisioned not just as a project, but as a transcontinental clean energy solution. Designed to leverage North Africa’s abundant sunshine and wind, it aimed to help the UK meet its ambitious 2030 net-zero grid goals while lessening reliance on natural gas. It would have featured an impressive 11.5 gigawatts of solar and wind capacity, complete with battery storage to supply steady baseload power.

Despite attracting major investors—think along the lines of TAQA, TotalEnergies, Octopus Energy, and GE Vernova—concerns quickly surfaced. Issues ranging from the project’s complexity, and the lengthy transmission requirements, to geopolitical risks associated with depending on a non-European partner began to loom large. The result? The UK government ultimately decided to retreat from this massive initiative, raising crucial questions about future international collaborations in renewable energy.

With global clean energy investments projected to reach an astonishing $3.3 trillion by 2025—two-thirds earmarked for renewables and storage—the UK’s move hints at a broader trend. It indicates a shift toward more resilient, localized energy systems, as opposed to grand, cross-border deals. Are we about to witness a new chapter in energy investments focused more on the home front?

While the Moroccan side has yet to respond to this disappointing news, there’s still a glimmer of hope for Xlinks. They might pivot their focus toward other European markets like Germany, which prompts reflection: Can Africa emerge as a major exporter of green energy, effectively claiming a stake in the global renewable energy market?

As we navigate this rapidly changing landscape, one thing remains clear—the journey toward a sustainable future is fraught with challenges, but it is also rich with opportunities. How will governments and companies learn from these experiences to forge a more resilient path forward?

Edited By Ali Musa
Axadle Times International – Monitoring.

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