Clean energy start-up Xlinks eyeing investor backing £16 billion revolutionary project | Business Newsletter

A British clean energy startup hoping to build the world’s longest underground cable capable of providing almost a tenth of the UK’s electricity will begin talks with potential investors. capacity in a project worth 16 billion pounds.

Sky News has learned that Xlinks, set up with the ambition of establishing a new source of cheap and reliable energy for Britain, has been close to hiring bankers to advise on the revolutionary plan.

The company wants to build a 3,800km cable line between North Africa and the UK that could transmit enough electricity to power more than seven million UK homes.

Xlinks has recruited a board of heavyweights to help deliver its vision, with Sir Dave Lewis, a former Tesco chief executive, being appointed company chairman last year.

Sir Ian Davis, former chairman of Rolls Royce Holdings, has also been recruited as a non-executive director.

The company has secured development funding of up to £40 million, but is now moving ahead with plans to secure the billions of pounds of financing needed to build solar and solar farm facilities. The vast wind capacity in Morocco, as well as factories in the UK, will manufacture the undersea cables on demand. for climate-friendly initiative.

The production sites in Hunterston, Scotland – where a nuclear power plant is decommissioning – on Teesside and at Port Talbot in Wales are both secured and in development.

Cable production operations will be overseen by XLCC, which will have separate sponsorship arrangements with Xlinks.

Xlinks intends to raise a combination of debt and equity to finance one of the most complex British energy projects ever conceived.

The company was founded by accounting firm EY Entrepreneur of the Year winner Simon Morrish, while its top team also includes Paddy Padmanathan, who runs ACWA Power, a developer of projects renewable energy project.

In an interview with Sky News business presenter Ian King to be broadcast on Friday, Sir Dave said it would take four years to produce the cable needed for the UK-Morocco link, which This will “create an entirely new, fast-growing manufacturing industry for the UK in the renewable energy space”.

He said it was conceivable that the first power could be supplied via the new cable in 2027, with it operating at full capacity just three years later.

Sir Dave and his colleagues at Xlinks are said to have held extensive discussions with the government about his plans, which are of particular interest to Whitehall amid Britain’s attention unprecedented in terms of energy security.

Earlier this month, the government set stretch targets for the long-term production of nuclear power, offshore wind and solar power, although its plan for energy independence is still thwarted by some. Observers criticized as “a missed opportunity” for ignoring the wind field on land.

“Global energy costs have been rising for a while as demand surged and factories resumed post-COVID-19; Putin’s invasion of Ukraine pushed them still higher and in the end it was consumers. There is a price to pay,” said Boris Johnson, the prime minister.

“This government has stepped in to help, with more than £9 billion in aid to families struggling with their bills.

“But if we’re going to lower prices and keep them there for the long term, we need a stream of energy that’s affordable, clean and, above all, safe.

“We need a supply of electricity made in the UK, for the UK – and that’s what this plan is about.”

Xlinks believes its £16 billion blueprint will be attractive to investors for a number of reasons, not least because the scale of clean energy it provides will make a significant contribution to the transition of UK to net zero emissions.

The company also says it will be able to deliver energy at £48 per megawatt-hour, below government forecasts and thus creating long-term savings for consumers.

At that rate it is also considerably cheaper than nuclear power as it is generated by a group of new power plants being built in the UK in the coming decades.

Xlinks is not seeking direct government funding, but is in talks with officials about settling on a predictable price that the Contracts for Difference mechanism will provide.

City insiders believe the size of the funding request is likely to attract large pension funds, sovereign wealth funds and infrastructure funds from around the world.

Sir Dave said another key factor will be the low geopolitical risk of the Xlinks given the UK’s centuries-old trading relationship with Morocco and the North African nation’s ambitions to develop its energy sector as part exports of this country.

“The Moroccan government has recognized that green exports [energy] is a very important part of their economic plans going forward, so they have an export strategy,” he told Ian King Live.

“The Sahara is probably one of the best places in the world to generate renewable energy from … so you have a very long time horizon.

“And if you’re capturing that power and adding some battery storage, you can generate the power to cover a little over 20 hours a day, which makes it a great partner for the Kingdom.” Brother.”

The former Tesco chief added that the quality of modern high-voltage cables means that energy can now be transported “over great distances with very little loss”.

Sir Dave said the technological risk associated with the project was relatively small, citing examples of much longer cable links being planned in other parts of the world.

“Any innovation requires bravery [and] leadership,” he said.

“The benefit here is that it’s proven technology with a trusted partner so committed to the cost profile … that we never would have. [be able to] match in England. “