The cost of the Xlinks Power Project, a colossal initiative to deliver green energy from Morocco’s Southern Provinces to power homes in the United Kingdom, has skyrocketed to between £22-24 billion (278 – 303 billion MAD), a significant increase from the projected £20 billion (252 billion MAD), said the company in a release on Tuesday.
Furthermore, based on 2012 prices, the projected strike price for the project is currently between £70 and £80 per megawatt-hour (884.7 – 1,011.1 MAD per megawatt-hour).
In its report, Xlinks First (the investment company for Morocco-UK power project) attributed around 60% of the cost increase to global supply chain events.
This increasingly common trend has been fueled by market-wide rises in raw material and energy costs, as well as an increase in worldwide demand for renewables.
The remaining 40% is due to direct macroeconomic influences, with interest rates being the primary determinant.
CEO of Xlinks First James Humfrey explained, “Our new guidance on the Morocco – UK Power Project strike price is broadly in line with what we are seeing in the wider market, and is caused by the impact of macroeconomic factors.”
He added, “Xlinks remains committed to delivering the Morocco – UK Power Project in the next decade, to supply 8% of the UK’s electricity demand, with affordable, reliable, clean power. We continue to make good progress in raising the private capital needed to deliver the project, as well as constructive dialogue with key stakeholders, including the UK’s Department for Energy Security and Net Zero.”