It is a daring project to say the least. It is even pharaonic in terms of the investment amount required for its realization: 21.9 billion dollars, the equivalent of 197 billion DH.
The goal of Xlinks, a London-based company, is to directly connect a renewable energy production site in southern Morocco to the British electricity grid via 4 submarine cables, each 3,800 km long.
The amount of investment involved, the technical and technological challenges to be faced may put its viability in doubt.
However, the board of directors of this company, as well as its management team that brings together various competencies, including some Moroccans, attest to the seriousness of the project.
As we explained in a previous article, Sir Dave Lewis, the former CEO of Tesco, a large British multinational operating in mass distribution, who left in 2020 is the CEO of Xlinks.
Paddy Padmanathan, CEO of ACWA Power, a major player in the renewable energy sector, particularly in Morocco, is the Vice President of Xlinks.
Simon Morrish, founder and CEO of Xlinks has agreed to answer Médias24’s questions about this project and, in particular, to inform us about the progress of the project and its next steps.
Media 24. How did the idea of the interconnection between Morocco and the United Kingdom come about? What is the genesis of the project?
Simon Morrish. The idea is not new. Its realization, at this time, is due to the economic context linked to the significant drop in the price of photovoltaic solar energy and the increasing use of HVDC cables to transport electricity over long distances.
When I realized that the price of PV power had dropped drastically, I wondered what was the most efficient way to get it to the UK and realized that HVDC cables of more than 3,000 km had already been built in China.
So, naturally, Morocco prevailed for the implementation of such a project for various reasons. The Kingdom is a world leader and a forerunner in the development of large-scale projects and for many years has created an attractive environment for investments in renewable energy.
The Moroccan industry is also very competitive and has the necessary experience for this type of project. Furthermore, the solar production profile in Morocco more closely matches the electricity needs in the UK.
From that point on, it was enough to look at the different economies related to the project to make sure that the overall model could be balanced, and it turns out it is.
– In what stage of progress is the project?
-After having completed all the initial evaluations of all the components of the project, whose results were very satisfactory, we began the studies and detailed designs for the production and transmission of electrical energy.
We are also working in parallel on the processes related to obtaining the necessary authorizations for the production, routing and distribution of offshore cables.
We are also dedicated to identifying areas of action to maximize value and benefits for the regions where the project will be implemented.
We want to actively contribute to creating opportunities for local populations, both in Morocco and in the UK.
Our goal is a financial close and the start of construction by the end of 2023.
– Which are the next steps?
-Soon we will start the selection of the different partners and suppliers. During this process, we will focus on increasing the local added value and the local integration rate by involving as many Moroccan companies as possible and encouraging international suppliers to invest and source locally.
Our goal is to be part of the already successful local renewable energy ecosystem and provide additional and sustainable opportunities.
The first feedback is very encouraging. Our goal is a financial close and the start of construction by the end of 2023.
– The amount of the investment is estimated at about 22 billion dollars. Have you started fundraising? How will this phase unfold? Will countries / governments be asked to contribute to the financing of the project?
-The funds necessary to finance the development phase are fully insured. The financing of the construction will require several stages of discussion with investors and will be carried out in parallel with the other components of the project.
The market has shown great interest in the project and we have already received expressions of interest from various financial institutions for contributions in debt and equity (commercial banking, export financing, pension funds, etc.) higher than the total amount required.
It is worth mentioning that the project will not need any subsidy from the government and this is another indisputable advantage it has.
– You mention on the Xlinks site, an agreement with National Grid. What exactly? Are other agreements or authorizations expected at UK level?
-We have secured two grid connections at Alverdiscott in Devon for 1.8 GW each. This is the only permit we now need from the UK government for the project.
We are also in negotiations with the UK government to award us a contract for difference (CfD) to secure a reference price of £ 48 / MWh.
This is a mechanism that benefits other renewable and nuclear projects. For this, there is all the necessary legislation and we are making progress in this regard in parallel with the other areas of work.
– Can you explain the technological decisions that were made for the production of renewable energy with an HVDC cable transport and storage system?
-One of the ways to ensure a continuous and reliable electricity supply from renewable energies is to combine several technologies that could produce electricity at different times of the day (night and day), so we combine solar and wind energy for this project. .
Battery storage will optimize and balance the intermittencies resulting from the two technologies. With this combination, we achieve an availability of 85% comparable or even higher than conventional non-renewable technologies.
HVDC, on the other hand, is the most suitable solution for transporting electricity over long distances, as it minimizes losses and thus enables reliable electricity to be transferred to the UK at optimal cost.