Plans for a large subsea cable factory in Scotland have been put on hold after the U.K. government rejected a multibillion-pound energy project linking Britain to Morocco, The Telegraph (UK) reported Friday.
XLCC, the company behind the proposed high-voltage direct current (HVDC) cable plant at the Port of Hunterston in North Ayrshire, announced a “strategic reset” involving downsizing and cost reductions. Six employees have been laid off.
The company cited shifting market conditions, noting that “several major projects have either been delayed, downsized, or cancelled altogether,” including the government’s decision to block the £25 billion ($32 billion) Xlinks project, according to The Telegraph.
The Xlinks project, overseen by former Tesco chief executive Sir Dave Lewis, sought to connect the U.K. to Morocco through a 2,500-mile undersea cable to import solar and wind energy from North Africa.
Industry sources told The Telegraph that Energy Secretary Ed Miliband’s decision to reject the project dealt a setback to XLCC. They also pointed to procurement practices by National Grid, which recently chose Japanese manufacturer Sumitomo Electric Industries as the preferred bidder for a separate Sea Link cable project between Kent and Suffolk.
XLCC had planned to begin construction of its Scottish facility next spring, aiming to start operations in 2028. The project, backed by the National Wealth Fund and the Scottish National Investment Bank, was expected to produce heavy-duty subsea cables to connect offshore wind farms and national grids.
Despite the pause, XLCC said it remains committed to building a “world-leading” HVDC cable manufacturing business in Scotland.
“Over the summer, it has become apparent that the market for HVDC has moved out in time as several major projects have either been delayed, downsized or cancelled altogether,” a company spokesperson said. “As a result, this is the right moment for XLCC to pause activities while we undergo a strategic reset.”
The company said it would share further updates following the conclusion of its review next year.
A spokesperson for the Department for Energy Security and Net Zero said the government is “actively working with a number of HVDC cable manufacturers, including XLCC, to unlock investment and accelerate the delivery of this critical infrastructure.”
“Through our industrial strategy, we are building home-grown supply chains that drive investment and growth, including Great British Energy and industry’s £1 billion fund to develop British offshore wind supply chains,” the department added.
National Grid declined to comment, The Telegraph said.
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