Why solar power from Morocco could be the answer to Rachel Reeves’s problems

Another week and another slew of initiatives from Rachel Reeves.

The chancellor is urging Britain’s biggest financial services firms to work with the European Bank for Reconstruction and Development and British International Investment – the finance institution overseen by the Foreign Office – to seize more investment opportunities in emerging markets. She wants to speed up securities trades. Reeves has held talks with investment bankers and asset managers to obtain their ideas on how to kickstart the UK economy. We’re told that regulators are in her sights; what are in theirs?

On it goes. All part of what has become the ministerial mantra of going “further and faster in delivering the government’s plan for change”. Meanwhile, inflation is climbing again, and next week we will learn how much our energy bills will rise by from April.

Still, there’s the third runway at Heathrow, and Britain’s own Silicon Valley (between Oxford and Cambridge) to look forward to – and 300,000 new homes to be built. The fact that Heathrow abuts the M25, and that rivers crisscross the local area, making the airport’s expansion a nightmare – and that previous governments also set a housebuilding target of 300,000 and failed to get anywhere close to it – seemingly does not matter.

But you would think, with all this foot-down driving, Ms Reeves and her colleagues would seize a chance to boost the economy, and to provide cheap energy at no cost to the taxpayer – wouldn’t you?

So how to explain that a project guaranteed to supply 8 per cent of the country’s electricity needs continues to wend its way around her department, and Ed Miliband’s Department for Energy Security and Net Zero, at a snail’s pace?

It is four years since Xlinks formulated its plan and first alerted the authorities to its intentions. The startup wants to run underwater cables to bring solar and wind power from 4,000km away in Morocco. If that sounds mad, it isn’t. Laying the lines is relatively easy, and is little different logistically from spreading the fibre-optic networks that go all over the globe.

Morocco has unlimited wind and sun; unlike here, there’s no dunkelflaute – the German term for dreary and flat weather that’s not remotely sunny or windy. Morocco wants the business. A site in Tan-Tan province in the southwest of the country has been earmarked for a wind, solar and battery facility. The total cost of construction, landing the clean energy in Devon and getting it into the National Grid, comes to £24bn, and would be borne entirely by the private sector. By the early 2030s, 3.6GW of renewable energy would be flooding into the UK from this one source. Indicative demand from excited, potential backers has already reached £35bn.

Investors can see that it is genius. And in case you were wondering, the company can lay 160km of cabling every 35 days. Did I mention, too, that a separate, partner company, XLCC, is to build the world’s first dedicated high-voltage direct current factory in Ayrshire, creating more than 1,000 jobs?

The Xlinks scheme promises, as well, to be of huge benefit to Morocco, a substantial trading partner with Britain. Morocco would collect the lease income from the solar and wind farm plus taxes, and its construction would employ 10,000 people. Once operational, 2,000 jobs would require filling. This initial venture could be the precursor to further such projects, and as they were developed, the expense would fall.

In short, Britain has the chance to lead the world, and to springboard a whole new industry, while fulfilling much of its energy demand. One calculation puts the benefit of Xlinks to the UK economy over 25 years at £19.3bn, with £5bn destined for the green supply chain. Which is why, when Xlinks founder and chief executive Simon Morrish went for long walks in Richmond Park during Covid with Sir Dave Lewis and asked if he would consider being chair, the former Tesco chief bit his hand off.

For Lewis and Morrish and their team, it’s a no-brainer. But try saying that to the mandarins who pore over the detail as part of the government’s Green Book process. Currently, Xlinks is awaiting approval of its outline business case.

What Xlinks really desires from the government is a contract with a strike price of between £70 and £80; in plain English, that means the guaranteed sum that electricity generators receive per megawatt-hour of output. By comparison, Sizewell C’s is £92.50, and Drax’s £113. Armed with a figure, Lewis, Morrish and co can nail down the sums and the investors. There would be four cables in total, laid in two pairs. They’d be armour-coated and would run through the territorial waters of Nato member countries.

Next week, Ofgem will announce the new energy price cap for homes in England, Wales and Scotland, with the increase forecast to be £85 a year per household. Another prediction from the experts is that Britain’s energy demand will increase by 19 per cent between 2030-2035.

One more thing: other countries are moving at pace to embrace similar projects. Rachel, Ed, a question: what, exactly, are you waiting for?