The UK’s Renewable Energy Landscape: A Promising Future
While Storm Éowyn caused significant disruptions recently, it served as a crucial reminder about the importance of ensuring energy security in the UK. Recent concerns surrounding potential electricity blackouts during periods of low sun and minimal wind highlight that energy should never be taken for granted.
Fortunately, the country did not experience any major electricity outages, but this situation has ignited fresh discussions about energy supply and sustainability.
In January, the National System Energy Operator (NESO) issued a “capacity market notice”, indicating a possibility of insufficient electricity generation to meet anticipated demand. In response, the market adapted by bringing additional generation online, albeit at prices that could reach up to 50 times the normal wholesale rates, primarily relying on imported gas. This reliance on gas emphasizes the urgent need to shift towards cleaner energy sources to combat climate change.
This winter marked the third notice from NESO, driven by unusually cold weather coupled with “dunkelflaute”—a condition characterized by very low wind and minimal sunlight, leading to increased demand amid low supply.
Despite these challenges, the UK’s renewable energy sector is thriving, and I am proud to contribute to it as the founder of Solarventus, which operates over 100 wind turbines, and Xlinks, the company spearheading a project to deliver solar energy from Morocco to the UK via an undersea cable.
Last year was unprecedented for green energy production, with renewables accounting for 58% of the UK’s total energy consumption. Wind energy emerged as the leading contributor, representing 30% of the energy mix, surpassing gas at 26.3%.
This positive trend is expected to persist, bolstered by a significant decline in the costs associated with renewable technologies over the past decade. Had we intensified our investments in renewable energy development and infrastructure in recent years, we could have reduced not just energy expenses but also the cost of everyday living.
The pressing challenge ahead is to establish a reliable supply of energy. Government initiatives are underway, guided by the prime minister’s commitment to cut carbon emissions by 81% by 2035, with Energy Secretary Ed Miliband leading the charge. However, accelerated efforts will be essential.
Having phased out coal and dramatically decreased carbon intensity, the UK’s renewable sector is flourishing, providing approximately 280,000 jobs and attracting significant investment. Companies like Octopus Energy, an investor in Xlinks, and projects such as the Dogger Bank wind farm—the largest offshore wind facility in the world, being constructed 80 miles off East Yorkshire’s coast—illustrate this growth.
The National Grid’s efforts on the North Sea Link, recognized as the world’s longest subsea interconnector between the UK and Norway, have been vital for optimizing energy storage. This project allows surplus electricity from the UK to be stored during windy periods and redistributed during calmer times.
Interconnectors enhance energy flexibility by enabling power transfer between neighboring countries, ensuring that excess electricity can flow where it is needed most. Currently, seven interconnectors serve the UK.
This growing network is paving the way for a global energy grid, enhancing economic opportunities in one country while diversifying energy sources in another.
Xlinks’ ambitious project for Morocco to the UK is set to utilize long-distance connectors, aiming for operational status by the early 2030s. It promises to power seven million homes, contribute an additional 10% reduction in carbon emissions, and help stabilize energy wholesale prices in the UK.
Furthermore, it will create substantial economic prospects for Morocco, generating tens of thousands of jobs and driving industrial growth through localized sourcing efforts. Critically, it will provide consistent electricity supply during peak demand hours, akin to nuclear power, but at significantly lower costs.
This initiative will be predominantly financed by private investors, requiring minimal government support aside from pricing assurances. The project encompasses solar, wind, and battery capabilities in Morocco, building upon a trading relationship that spans two centuries between the two nations, linked by approximately 2,500 miles of high-voltage direct current (HVDC) cables.
Launching such a project comes with significant hurdles. Initially, our venture faced challenges in securing proper funding; we found ourselves too large for venture capital yet too nascent for lower-risk infrastructure funds, confronting what is often termed the “valley of death,” a common pitfall for emerging startups.
Ultimately, we shifted our focus to strategic investors, including energy companies like Octopus, Total, and Taqa, the Abu Dhabi National Energy Company, as well as equipment suppliers such as GE Vernova, who possess the vision and capacity to invest at our early development stage.
However, we discovered that being based in the UK posed challenges in attracting funding compared to analogous companies in the US, where risk tolerance is considerably higher during the early stages of development.
Reflecting back, I ponder how we could have expedited our emergence from that challenging phase. What’s important is that we persevered and now, with momentum on our side and significant project development underway, we are on track to secure the approximately £20 billion needed for construction. In fact, investment banks are approaching us with unsolicited offers to underwrite the full amount, highlighting the importance of understanding your target investors at every growth stage.
Concurrently, our operational partner, XLCC, is constructing the world’s largest HVDC factory in Scotland, aimed at producing the cables we require and addressing global shortages. This infrastructure will allow the UK to gain greater control over the renewable supply chain while also capitalizing on the associated economic benefits. It is heartening to witness the UK, a nation with a longstanding tradition of industrial innovation, continuing to rise to energy demands.
Simon Morrish is the founder and chief executive of Xlinks as well as the chief executive and majority owner of Ground Control, located in Billericay, Essex.
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