UK Government Rejects £25bn UK-Morocco Green Energy Deal

Miliband backs homegrown energy over importing cheaper solar power from Sahara megaproject

Government Pulls Plug on Xlinks Renewable Power Deal

The UK government has rejected a proposed £25 billion renewable energy project from Xlinks, a private firm planning to import solar and wind power from Morocco. The project aimed to supply up to 8% of the UK’s electricity needs via a 4,000km undersea cable linking Morocco to Devon.

Energy Secretary Ed Miliband is expected to announce the decision officially, citing a desire to prioritise "homegrown" energy production.

Xlinks Offered Cheap, Clean Power

The project, chaired by former Tesco CEO Sir Dave Lewis, promised to deliver renewable power at £70–£80 per megawatt hour—almost half the cost of new UK nuclear projects such as Sizewell C, which recently secured £14bn in government funding.

Xlinks had requested a 25-year Contract for Difference (CfD)—a price guarantee—but not any direct taxpayer funding.

Industry Surprised by Government Rejection

The decision to reject the deal has stunned energy industry insiders, given its potential to address the intermittency of renewable power in the UK and provide a cost-effective, clean energy source.

Industry sources also questioned the government’s "homegrown energy" rationale, noting the strong UK-Morocco trade ties and the Sahara Desert’s ideal solar conditions.

Cable Project Was Oversubscribed

Backed by investors including French energy giant Total, Xlinks has raised over £100 million in development funding. Financial interest in the project was reportedly significantly oversubscribed.

The cable would have used proven high-voltage technology capable of transmitting energy over long distances with minimal loss, offering power coverage for over 20 hours per day with storage support.

Potential Security Concerns?

While the government hasn’t officially commented, some analysts speculate that rising concerns about undersea cable sabotage could have influenced the decision.

However, Sir Dave Lewis previously told Sky News that the project carried low geopolitical risk, noting the Moroccan government’s strong commitment to becoming a green energy exporter.

Xlinks to Seek Opportunities Elsewhere

Xlinks had warned that if UK support was not forthcoming, it would shift focus to other countries. Following the decision, the company is expected to explore commercial opportunities outside the UK.

Summary: What's at Stake?

• £25bn UK-Morocco project rejected by UK government
• Power would have supplied up to 8% of UK demand at low cost
• Cited reason: focus on "homegrown energy"
• Industry surprised, citing oversubscription and low risk
• Xlinks likely to pursue international alternatives

Sources: (SKY.com, Sunday Telegraph)