The UK government's June 2025 rejection of the GBP 24 billion Xlinks Morocco-UK Power Project reveals the deepening fault line between renewable energy ambition and national energy security doctrine.
The promise was staggering in its ambition: 4,000 kilometres of undersea cable, stretching from the sun-scorched Guelmim-Oued Noun region of southern Morocco, snaking up the Atlantic coast past Spain, Portugal and France, before arriving on the Devon coastline to feed clean electricity into Britain's national grid. The Xlinks Morocco-UK Power Project, backed by a roster of serious investors including TotalEnergies, Abu Dhabi's TAQA, and Octopus Energy, spent years marshalling the financial and political capital required to make history. By 2023, the UK government had formally designated it a project of national significance. By June 2025, it was dead - killed not by insolvency or engineering failure, but by a single ministerial decision rooted in a contested calculation about where Britain's energy future truly lies.
The project was conceived by Simon Morrish, a serial entrepreneur who personally funded the bulk of the GBP 30 million in seed capital that gave Xlinks its early momentum. The idea was deceptively elegant. Morocco's Guelmim-Oued Noun region possesses some of the most formidable renewable energy characteristics on the planet. Its position gives it the third highest Global Horizontal Irradiance in all of North Africa. The prevailing Atlantic winds, driven by temperature differentials between the Sahara and the cooler ocean, blow most powerfully in the afternoon and evening - precisely when Britain's own wind generation tends to slacken. Combine rooftop-scale solar, large wind capacity, and a 22.5 GWh battery storage system, and the cable could run at full capacity for more than 19 hours a day on average.
Morrish recruited a board that blended energy expertise with political credibility. Sir Dave Lewis, the former Tesco chief executive who steered that company through a major accounting scandal, became executive chairman. Paddy Padmanathan, former CEO of Saudi renewables giant ACWA Power, took the role of vice-chair. Sir Ian Davis, former chairman of Rolls-Royce Holdings, joined as a non-executive director. The message was deliberate: this was not a fringe proposal but a serious infrastructure play with institutional-grade governance.
By 2024, the headline figures were extraordinary. The project would deploy 11.5 GW of generating capacity - split between a solar farm covering around 200 square kilometres and a wind farm spanning roughly 1,500 square kilometres. Its estimated cost had grown from the original GBP 16 billion to somewhere between GBP 20 billion and GBP 24 billion, with half of that sum allocated to the interconnector cable alone. The transmission losses across 4,000 kilometres of high-voltage direct current (HVDC) cable were estimated at 13% - significant, but manageable given Morocco's generating surplus. In April 2024, Xlinks published pricing guidance suggesting it would seek a Contract for Difference (CfD) strike price of GBP 70-80 per megawatt-hour at 2012 prices - roughly comparable to the Hinkley Point C nuclear contract, and by Xlinks' reckoning, far cheaper per unit of reliable, dispatchable power.
The project did not simply appear on ministers' desks. It was cultivated, lobbied for, and gradually embedded into the machinery of UK energy policy through sustained effort. In September 2021, Xlinks confirmed it had secured land rights with the Moroccan government for the generation site. By October that year, it had reached a grid connection agreement with National Grid at Alverdiscott in North Devon. In May 2022, Octopus Energy made a financial and strategic investment. In November 2023, TotalEnergies confirmed a GBP 20 million stake. By April 2024, Abu Dhabi's TAQA had contributed $31 million and GE Vernova and the Africa Finance Corporation had added further backing. JP Morgan and Societe Generale had both confirmed the project was well-positioned to secure construction financing.
The Conservative government's 2023 energy security plan - titled Powering Up Britain - stated that the government was evaluating "the viability and merits" of the Morocco-UK project. In August 2023, Secretary of State Claire Coutinho formally designated Xlinks as a nationally significant infrastructure project, triggering an accelerated planning and consent process. The project's Development Consent Order application moved forward. Three survey vessels began conducting seabed environmental studies. In Scotland, Xlinks' cable manufacturing affiliate XLCC secured planning permission for a new factory at Hunterston, Ayrshire, with capacity to employ 900 people and manufacture the four giant HVDC cable sets. Twelve apprentices had already been recruited.
Then came the July 2024 general election, which swept Labour into power with a commanding majority. The new energy secretary was Ed Miliband, a veteran climate advocate and architect of the original Climate Change Act. Miliband's appointment seemed, to many in the project's camp, like reason for optimism. His department spent months evaluating the proposal. Xlinks CEO James Humfrey - appointed in February 2024 to run the UK project specifically while Morrish focused on broader strategy - continued engagement with officials. In May 2025, as ministerial deliberations dragged on, the company paused its DCO examination process to avoid misalignment with the CfD timeline, describing the move as a strategic pause, not a suspension.
The pause proved prophetic. On June 26, 2025, energy minister Michael Shanks rose in Parliament to deliver the government's verdict in a written ministerial statement.
The language of the statement was measured but final. The government had concluded, Shanks told Parliament, that it was "not in the UK national interest at this time to continue further consideration of support for the Morocco-UK power project." Three interlocking objections underlay the decision.
First, strategic misalignment. The government's central energy mission was framed around building "homegrown" power for Britain - wind farms in the North Sea, solar across English farmland, pumped hydro in Scottish glens. A project whose entire generation base sat on foreign soil, in a foreign jurisdiction, was philosophically at odds with that vision regardless of its economic merits.
Second, risk accumulation. Shanks' statement called the project "a first-of-a-kind mega-project which has a high level of inherent, cumulative risk - delivery, operational, and security." The security dimension was pointed. For government officials, the idea of routing 8% of Britain's electricity needs through 4,000 kilometres of undersea cable, across the territorial waters of four countries, and dependent on generation facilities in North Africa, raised questions about vulnerability to geopolitical disruption that no amount of engineering redundancy could fully resolve. The Russia-Ukraine war had sharpened European sensitivities about energy dependency on distant suppliers. Deliberately replicating that exposure, even with a friendly partner like Morocco, was a risk London was unwilling to price.
Third, supply chain economics. Domestic alternatives, the government argued, would generate UK jobs and sustain UK industrial capability in a way that offshore generation in the Sahara fundamentally could not. The GBP 5 billion that Xlinks projected as UK supply chain spend was real, but it was dwarfed by the estimated GBP 19.3 billion in first-order net societal benefit to the UK that the project itself claimed in its AFRY analysis. The government's emphasis on domestic supply chains reflected a wider political calculation - one shaped as much by industrial policy as by energy policy.
Sir Dave Lewis did not hide his feelings. He described the decision as representing "huge surprise and bitter disappointment," noting that over GBP 100 million in development funding had already been spent, that lender demand for the construction phase exceeded what was required, and that the project had been on track to begin construction before 2030. "The international investment community identified the potential of the opportunity," he said. "If not the UK, then others will step up."
Xlinks was not, of course, the first attempt to harness the Sahara for European electricity. In 2009, the Desertec Industrial Initiative assembled a consortium that included E.ON, Munich Re, Siemens, Deutsche Bank and HSBC, backed by a vision of meeting 15% of Europe's electricity needs from North African concentrated solar power by 2050. The estimated cost was EUR 400 billion. By 2014, after the Arab Spring unsettled investor confidence and falling solar panel prices made domestic European generation increasingly competitive, the consortium had shrunk from 57 shareholders to three. The project was widely declared dead.
The Desertec ghost hung over every Xlinks negotiation, and government officials knew it. There were genuine differences between the two. Xlinks used proven photovoltaic and HVDC technology rather than Desertec's more experimental concentrated solar systems. It had secured hard equity from credible counterparties, not merely letters of intent. It was asking for a price guarantee - a CfD - rather than direct construction subsidies. Its generation site was in Morocco, a stable constitutional monarchy with a functioning export strategy and an established trading relationship with Britain, rather than the politically volatile states that had undermined Desertec.
But the Desertec legacy seeded a reflexive caution in government. Any transcontinental renewable megaproject - however technically differentiated - would face the same fundamental question: what happens to 8% of Britain's electricity supply if something goes wrong 4,000 kilometres away? This was not a hypothetical. Baltic Sea cables had been mysteriously severed in recent years. The Nord Stream pipelines had been destroyed in what most Western governments attributed to deliberate sabotage. Undersea infrastructure had become a documented geopolitical pressure point. The very characteristics that made HVDC cables technically elegant - their concentration of enormous power flows in a single physical structure - made them single points of failure at a national-infrastructure scale.
The government's framing of domestic alternatives as "stronger options" was open to challenge. Xlinks' own analysis, conducted by AFRY, had concluded the project would reduce UK wholesale electricity prices by 9.3% in its first year of operation and deliver GBP 19.3 billion in net societal benefit. The CfD price guidance of GBP 70-80 per MWh was significantly below nuclear alternatives. The project was privately financed in its entirety - meaning the government was being asked not to fund construction but simply to guarantee a price, with Xlinks absorbing all investment risk. Market testing had been oversubscribed, suggesting the financing was genuine rather than aspirational.
The government's counter-argument rested on the premise that domestic offshore wind, onshore solar and emerging technologies could meet the same reliability requirement at lower systemic risk. That premise is debated. Britain faces the Dunkelflaute problem - extended periods when wind generation collapses across the entire northwest European weather system, sometimes lasting weeks. Morocco's weather is statistically uncorrelated with Britain's. The very decorrelation that Xlinks promoted as a feature - that Morocco generates most powerfully precisely when Britain's grid is most stressed - was ar…