XLinks was formed around three years ago in response to the astonishingly low costs of solar projects in the Middle East and North Africa, which have been breaking records on a regular basis. “At the time it was getting down to as low as $15/MWh,” Morrish tells Utility Week. “Now it’s down to $10-11/MWh in some of the recent tenders.”
The company has secured 1,500 square kilometres of desert in the south of Morocco, where it plans to build a whopping 7GW of solar, 3.5GW of wind and 20GWh of batteries that will feed power to two bipolar high voltage direct current (HVDC) interconnectors to the UK, each with a capacity of 1.8GW.
Given Morocco’s long hours of sunlight and high irradiance, Morrish says the interconnectors will be able to operate at a load factor of 85%, meaning they will effectively provide 3.6GW of baseload power – similar to that of a large nuclear power station.
He says they will also be able to do so at half the price. XLinks is seeking Contracts for Difference at a strike price of just £48/MWh: “That compares very favourable to Hinkley at £92.50/MWh and we believe with the amount of nuclear and gas coming off the grid over the next five to ten years, a solution like this is overwhelmingly compelling to keep prices down for consumers”.
Morrish says they have already made good progress, with the project being designated as one of national significance in Morocco, which has “strategic ambitions” to become a major power exporter to Europe.
On the UK side, the company has secured grid connections at Alverdiscott in Devon and planning permission for 90% of the cables’ route through the county.
If all goes well, Morrish says they hope to have the first of the two interconnectors operational in 2027, “which is much, much earlier than Hinkley and a lot earlier than anything else that can be delivered,” and the second in late 2029 or early 2030.
Travelling more than 3,800 kilometres along the seabed, Moorish says these subsea interconnectors, which would become by far the world’s longest, represent the most challenging part of the megaproject.
However, Morrish says this is not so much for technical reasons, with the scheme in general utilising “known and reliable technology” in terms of the solar panels, wind turbines, batteries and cables. The interconnectors would “hug the coast” of Portugal, Spain and France, never dipping below 700 metres in depth.
He says the current record holder – the 720-kilometre North Sea Link connecting the UK and Norway, which began operating in October – arguably faced greater challenges in this regard as “they were having to go through complicated fjords with steep gradients, across inland lakes, tunnelling through mountains.”
Instead, the main obstacle to overcome is the lack of cable production capacity of which “there is quite a shortage”.
To address this issue, XLinks is planning to build its own factories: “We have entered planning permission in Hunterston and we are about to in Port Talbot for building our own cable factories to be able produce this. HVDC technology is rapidly gaining traction over alternating current technology.
“The problem is the capacity in the market is not there so if you place an order today, it could be between four and six years for getting an actual cable. We need to build that capacity and that’s probably the most complicating factor of the overall project.”
Morrish says he has no such concerns over the generation in Morocco: “Those dates are quite easy to achieve so we’ll actually have quite a bit of spare capacity in there and the budget plan is already ahead on the Moroccan side. Clearly, there’s no point building all the generation if we can’t transmit it anywhere.”
He continues: “The interesting thing about this project is we’ll not be connecting to the Moroccan grid so this will be solely for the benefit of the UK. Morocco’s got plenty of projects it’s already progressing for its own grid.
“We saw clearly in the recent energy price spikes that these interconnectors are great but when we’re short of electricity so are our neighbours and so actually the electricity pricing coming in from France or anywhere else wasn’t a great help to us because everybody’s short of electricity at the same time.”
With an estimated total price tag of £16 billion, XLinks will need to secure a lot of capital but Morrish says they have already lined up all of the development funding and are in “good discussions” with both equity and debt funders for the rest.
They will also need to get buy-in from the UK government as the project does not currently “fit into any bucket” within the Contracts for Difference auctions.
He says: “We’re very happy to bid into any bucket or we’re hoping the government will look at this as a bilateral negotiation as an alternative because ultimately, unlike Hinkley or any of the other projects they’ve had bilateral negotiations for, this is actually unsubsidised.
“We’re below their central, and even their low, reference prices for energy over the next 20 years. We believe this should be a much simpler mechanism for the government to engage in.”
“At this stage, we’re having those productive discussions and it’s a bit early to say exactly what the outcome will be,” he adds.
If the project proves successful, Morrish says it could be the beginning of something much larger: “We very firmly see a world where this helps solve the decarbonisation race. The reason we are doing this is because not only does this project significantly move the needle on accelerating us to net zero, but it paves the way for many, many future projects to be able to help this happen.”
“You need a very small proportion of the Sahara Desert to be able to power the whole of Europe,” he remarks. “This is absolutely something that can help solve our issues.”
He says there’s certainly room for more renewables in Morocco: “It’s a leader in renewable energy already. It has a very stable and forward-thinking government in terms of moving these kinds of things forward. We can always look elsewhere but Morocco’s been a great partner to us and has got real strategic ambitions to be able to export power to Europe and help Europe meet its renewable energy requirements.”
That said, Morrish says this type of project should be one part of a diversified energy portfolio: “You just have to look at how dependent Europe is on Russian gas right now to see how vulnerable we are to a situation that’s really quite unpalatable for us, so I think that would need to be seen and looked at from some policy-makers perspectives, but certainly the amount of energy coming from Morocco could increase significantly after this project.
“And, by the way, this is the very first of its kind so we would expect future projects to continue to come down in cost.”