Skip to content Skip to Search
Skip navigation

Budget for Xlinks UK-Morocco energy project rises

UK Secretary of State for Energy Security and Net Zero Claire Coutinho Reuters
UK energy secretary Claire Coutinho has granted the Xlinks project Nationally Significant Infrastructure Project status, allowing it to bypass local planning reglulations
  • Xlinks to provide renewable energy to UK
  • Exceeding budget by £4bn
  • Seeking higher guaranteed unit prices

The Xlinks Morocco-UK renewables project has run over budget by £4 billion ($4.8 billion) but the company is continuing to push ahead with the project, saying that it remains good value for money.

“The rising cost is no different to what’s happening everywhere else,” Xlinks’ CEO Simon Morrish told AGBI, highlighting changes in supply chain costs, inflation and the exchange rate.

Chaired by former Tesco boss Sir Dave Lewis, Xlinks had been hoping to deliver the project for £18 billion but Lewis told The Times last week that the budget would now increase to between £20 billion and £22 billion.

Morrish, however, said that the Xlinks budget increase does not pose any risk to the project.

“Hopefully we’re about to get another investor on board very shortly,” he said.

“Between them and our two existing investors, we have £8 billion of the equity lined up, which is almost all we need for this stage of the project.”

Taqa, the UAE’s largest power producer, in April gave a substantial vote of confidence to the Xlinks project with the announcement of AED113 million ($31 million) in funding.

However, timescales for the project are at risk of extending as talks drag on over finalising a contract.

Xlinks is seeking a 25-year contract for differences (CFD) from the UK government to guarantee that British consumers would pay a set price for the electricity it produces, regardless of market prices.

Price agreements

Widely used to support renewable energy projects in the UK, the CFD mechanism functions on the basis that if market prices fall below an agreed headline price then consumers will pay subsidies to a project, but, if market prices are higher, the project will pay the difference back to consumers.

Xlinks had originally been seeking a CFD with a headline price set at £47 per MW hour for solar and £52 per MW hour for onshore wind relative to 2012 prices –- the year in which the UK government’s last auction round for contracts was held.

However, it is now requesting a CFD of £56 and £64 per MW hour in 2012 prices, which is equivalent to about £77 and £87 MW today.

“The reason we’re asking for a higher headline price than a wind or solar project is because we’re a combined wind-plus-solar-plus-battery project that will provide a much, much higher capacity factor than is available in the UK,” Morrish said.

The site of the Xlinks project experiences 3,500 hours of sunshine a year, compared with 1,500 annual hours in the UK.

The project will be capable of supplying energy for 20 hours a day – including, crucially, when the wind is not blowing in the UK.

“The energy that Xlinks can provide is base-load equivalent to a nuclear project such as Hinkley, but we’re two-thirds the cost of a typical nuclear project and we can build it in half the time.”

The headline price for the power supplied by the UK’s Hinkley Point C nuclear power plant is £92.50 in 2012 prices.

The Xlinks project was given a shot in the arm last week when it was granted the status of a Nationally Significant Infrastructure Project (NSIP) by the UK’s new energy secretary, Claire Coutinho.

NSIPs bypass normal local planning requirements, with approvals sitting with central government instead of the county council.

The government said the designation would provide “certainty of a single, unified consenting process and a fixed timetable”, which is set at 18 months. 

Morrish noted that 99 percent of Development Consent Orders – the means of obtaining permission for developments designated as NSIPs – are approved.

Latest articles

EGSH

Dubai launches one-stop hub to streamline government services

People in Dubai can now obtain an Emirates ID, register a company, open a bank account and more under one roof following the opening of the Emirates Government Services Hub (EGSH). Owned by Sheikh Mohammed Bin Maktoum Bin Juma Al Maktoum, a member of the Dubai Royal family, EGSH allows clients to access all essential […]

In association with
Thailand's consul general Kitinai Nutakul visits the Saudi Ministry of Foreign Affairs in Jeddah

Thailand opens investment office in Saudi Arabia

Thailand’s Board of Investment (BOI) is opening its first Middle East office in Saudi Arabia, signaling a deepening of economic ties between the nations after a longstanding diplomatic spat. The office will focus on attracting Saudi investment into Thailand’s targeted industries and supporting Thai entrepreneurs looking to invest in the region, the BOI said in […]

hajj saudi arabia

Saudia reports big rise in international passengers

Saudi Arabia’s national carrier Saudia reported a 24 percent increase in international passengers to 9.1 million in the first half of 2024. There was also a 13 percent rise in the number of flights. The Hajj pilgrimage in June played a large part in the growth.  The number of passengers flying on domestic routes rose […]

Abu Dhabi has published its new whistleblowing framework to 'maintain transparency, accountability and market integrity'

ADGM sets deadline for whistleblowing rules

Companies in the Abu Dhabi Global Market (ADGM) have been given a deadline of May 2025 to implement the latest whistleblowing regulations. The financial authority has published its new whistleblowing framework to ‘maintain transparency, accountability and market integrity’. The framework includes regulations on reporting of protected disclosures, allowing reporting of suspected breaches of ADGM legislation […]