The UK government has declined to move forward with a £25 billion renewable energy scheme designed to supply nearly 10% of the nation’s electricity demand through solar and wind power generated in Morocco.
The decision marks the end of discussions with Xlinks, the company behind the ambitious project.
Energy Secretary Ed Miliband has chosen not to enter formal negotiations with Xlinks over a 25-year contract for difference, which would have secured a fixed price for the electricity delivered via a 4,000-kilometre undersea cable linking Morocco to the Devon coast. A ministerial statement confirming the decision is expected imminently.
The move has surprised industry leaders, especially as Xlinks claimed its energy would cost significantly less than new nuclear power, such as the Sizewell C project, which has already secured over £14 billion in taxpayer funding.
Xlinks estimated it could deliver power at £70 to £80 per megawatt hour—roughly half the cost of nuclear alternatives.
The company, chaired by former Tesco CEO Sir Dave Lewis, was not seeking direct taxpayer funding. Instead, it proposed a model to enhance UK energy resilience by reducing the impact of intermittent renewable supply, while simultaneously lowering long-term costs for manufacturers and households.
Despite strong support from investors—including French energy major Total—government insiders suggested the decision was influenced by a renewed focus on domestic energy generation. That rationale has been questioned by energy analysts, given the advanced stage of Xlinks’ financial planning and the oversubscription of its market-testing efforts.
Earlier this year, Sir Dave warned that Xlinks would pursue alternative opportunities abroad if the UK did not back the initiative. With government support now withdrawn, the company is expected to shift its focus to other global markets.
The project was widely regarded as a potential solution to the UK’s renewable energy storage challenge. The Sahara’s intense solar capacity combined with battery storage would have enabled around 20 hours of energy generation per day, with minimal transmission losses thanks to modern high-voltage cable technology.
Concerns have been raised about whether the government’s decision was influenced by security risks associated with undersea infrastructure, although this has not been confirmed. Xlinks maintained that geopolitical risks were low, citing the UK’s longstanding relationship with Morocco and the North African country’s growing green export ambitions.
Sir Dave previously described the project as one of the world’s most cost-effective and technically feasible long-distance renewable energy solutions. He pointed to similar projects worldwide using proven technology and said that Xlinks had the capability to deliver stable, low-cost energy on a scale unmatched by domestic production.
While the Department for Energy Security and Net Zero (DESNZ) declined to comment on the reports, Xlinks also remained silent on Thursday. The future of the project now hangs in the balance, as the company evaluates alternative international partnerships and commercial opportunities.
As Britain faces increasing pressure to meet its net zero targets and reduce reliance on fossil fuels, critics argue the rejection of this innovative project is a missed opportunity for clean, affordable, and scalable energy.
