Xlinks First, the UK company dashing ahead with a plan to build a 3.6GW HVDC power connection between Britain and vast Moroccan renewable energy plants, has appointed former Shell executive James Humfrey in a sign that the project is now entering into a new phase of development.
Founder and former CEO Simon Morrish will now take care of Xlinks' new business portfolio, as well as a sister company that aims to fill the supply chain gap for manufacturing and installing subsea cables.
Morrish told Recharge this week that the growth plan for Xlinks’ $25bn Morocco UK Power Project portfolio had reached the stage where it was time to appoint a dedicated CEO with the highest qualifications for the job.
The project has gained considerable traction in recent months, attracting equity investments from Octopus Energy in the UK, as well as global energy giants such as TotalEnergies and Abu Dhabi National Energy Company (TAQA).
Xlinks aims to power the UK grid with solar and wind energy from Southern Morocco on a scale that would cover an estimated 8% of the UK’s national electricity.
It will link four high-voltage direct current (HVDC) cables over a marine distance of 3,800km to connect 10.5GW of solar and wind facilities and 5GW/22.5GWh of battery storage in Morocco to two pre-agreed 1.8GW grid connections in Devon, southwest England.
The project will tackle the problem of renewables intermittency head-on by connecting the UK to a region with completely different irradiation levels and inverse correlations of daytime trade winds and evening convection winds.
The UK government has already granted the project Nationally Significant Infrastructure Project (NSIP) status, and Xlinks hopes it can secure a negotiated Contract for Difference (CfD) power deal that could serve as many as seven million homes under Britain's green power support programme.
We're putting the pieces together at a scale and combination that hasn’t been done before.
Humfrey said the project, while potentially the biggest renewables project in the world, was made up of sub-components and operations that are familiar.
“I think what's interesting and unique about this is that we're putting the pieces together at a scale and combination that hasn’t been done before. I think you need that to really make a dent in the energy transition, because we have to move faster and we have to move at scale to really move the needle. And I think that's what is so exciting about this project,” he told Recharge.
A negotiated CfD, if it comes, is likely to pay higher rates than auctioned offshore wind contracts, but perhaps less so since the UK government boosted terms for the AR6 renewables round.
On the other hand, Xlinks' backers say, it will be considerably cheaper than any deals underpinning additional nuclear capacity and yet can ultimately be described as "flexible and dispatchable".
"We average 19 plus hours a day, and the times when we're not delivering is overnight when the power is not required... It's a combined wind, solar, battery generator, which is as valuable as nuclear, but we're about two thirds of the cost," Morrish states.
"(Like nuclear), we are producing when others aren't, which is really, really valuable," he added.
Canyons not colossal
In development terms, Belgian marine company GEOxyz has finished reconnaissance surveying and is moving on to geophysical and geotechnical studies.
The cable laying presents challenges on several canyons off Portugal and one of France but Morrish said the company was establishing a “very clear route” and he noted that the technical challenges were “much less complicated” than those that were overcome on the 1,158km North Sea Link interconnector between Norway and the UK.
Morrish also took a moment to tout the qualities of those who have flocked to join the Xlinks project, including board member Nigel Williams, who was project director of North Sea Link, and “has attracted the top people on HVDC from this country and others”.
Morrish claimed that Xlinks continues to make “really good progress” with a UK government he described as “supportive and helpful”.
Pressed on the timing of the CfD, he said “hopefully sometime in the summer”.
All renewables generation capacity will be operated as an asset, allowing for optimisation geared to ultimately lowering the costs for UK consumers, Humfrey adds.
"We've effectively sized the generation to be able to meet optimal prices. And one that is effectively to be able to provide power absolutely reliably on a cold, wet damp February afternoons, when there's no wind, there's no sun, and maximum demand on the grid".
From the Moroccan perspective, the project will provide land rents and tax revenues, but also includes a 42% local content that is intended to extend beyond construction to supply chain elements for the renewable power generation.
'Right speed'
Xlinks may be leading the pack among long-distance international HVDC supply cables, but there are others in the offing, including one between Egypt and Greece and another between Tunisia and Italy.
So, more projects are edging forward at time when supply chain challenges stand in the way of those wanting to procure and lay cables.
Humfrey’s own past experience includes 25 years of experience in managing international energy projects, including periods as vice president of global capital projects contracting, chemicals capital and M&A for Shell and, more recently, executive vice president for growth and industry at Abu Dhabi energy giant ADNOC, where he led capital project and business development.
He said he had been able to take a “good look” during due diligence and came to the conclusion that the project is going at about the right speed.
“You need to be sure megaprojects don’t go too fast. You need to be very thorough with your engineering, deliverables and all the other pieces for front-end loading," he said.
Morrish said Xlinks is still ahead of rivals and highlighted a parallel project, through an independent sister company called XLCC with plans for a major cable manufacturing facility in Hunterston, Scotland.
The factory, near closed nuclear power station, was granted planning permission last year and awarded a £9m ($11.4m) Scottish Enterprise grant towards a £1.4bn price tag that will also include the cost of building a giant cable-laying vessel.
The cable laying perations, when they start, are expected to be carried out in two one-year phases, and project planners are targeting the end of 2030 for first electricity and COD by 2031.
"The real big bottleneck is supply chains. It's manufacturing the cable, and it's manufacturing converter stations. If it wasn't for those two things, we would be much, much earlier," Morrish admits.
In addition to the cable plant, Morrish's XLCC offshoot is reportedly working toward an order of a large installation vessel later this year, looking also toward a wider market, as well as the Xlinks scope.
The Xlinks founder told Recharge that an announcement on a new project involving an overseas interconnector project is imminent.
“We expect the Morocco–UK Power Project will serve as a model for future initiatives,” he said.
French fillip
The Xlinks project earned a very big fillip last November when French supermajor TotalEnergies joined as an equity partner, participating in development even ahead of a final investment decision.
“I think probably one of the biggest things was bringing on a partner like TotalEnergies. They did a huge amount of due diligence, both technically and politically on this and they do not invest small amounts of money into projects,” Morrish said.
With yet another partner about to sign up, Morrish said all of the equity is in place, with financial close now “about 18 months” away. He said this time is expected to include completing all procurement, legal matter, a debt-equity arrangement of around 70-30 and the CfD from government.
On the debt Humfreys described positive discussions with banks who were “extremely interested…especially with the strong equity backing.”
He also predicted that the project would get export credit, where there was also “strong interest”. A financial advisor is set to be announced imminently too.
Xlinks’ executive chairman Sir Dave Lewis, a former CEO of UK supermarket Tesco, commented on Humfrey's appointment: “James brings a wealth of expertise in delivering large complex energy projects to Xlinks, along with experience working with major global investors in the industry."
Also on the Xlinks board is Paddy Padmanathan, former CEO and president of ACWA Power.
