Sir Dave Lewis explains how Xlinks will solve the energy crisis

“Why wouldn’t you?” asks Sir Dave Lewis when I ask him why he got involved in Xlinks, an audacious £22 billion scheme to bring Moroccan wind and solar power to Britain via the world’s longest electricity cable.
“If you care about what happens to the planet and somebody comes and shows you a credible way — backed by an intelligent, experienced group of people — to lower the price of energy, drive the green transition and take carbon out of the system, I think the question is why wouldn’t you? Not why,” the former Tesco chief executive explains.
The Xlinks idea is simple: when the sun is not shining in Morocco the wind blows, which means that the company is convinced it will be able to provide the UK with reliable and cheap renewable energy 19 hours a day (with a little help from a battery plant) .
Lewis makes it sound easy: but the Xlinks project is clearly anything but. The solar and wind plant in Tan-Tan province in southwest Morocco will be built on a site the size of London. The electricity generated will be transported via four 2,360-mile cables.
As Lewis is at pains to point out, though, while the ambitious project is big, very big, all the technology involved has been tried, tested and used before. “There is no technology risk. It is just about the scale of the link between Morocco and the UK,” he says.
The reward is equally large: Xlinks believes that it can produce 3.6GW, about 8 per cent of the UK’s electricity demand or enough to power seven million homes, once it is fully operational.
Three years after Simon Morrish, Xlinks founder and chief executive, persuaded Lewis to become chairman of the UK start-up during long Covid-era walks in Richmond Park, southwest London, the enormous project is inching closer and closer to reality.
The Conservative government classified the development as “a project of national significance”, streamlining the planning process for the project, which counts the French oil and gas group TotalEnergies, the Abu Dhabi National Energy Company and Octopus Energy among its backers.
Last month XLCC, which will manufacture the high-voltage direct current (HVDC) cables key to the project’s success, secured an initial £20 million investment from the UK Infrastructure Bank to build the world’s first dedicated HVDC factory in Hunterston, Ayrshire. There is an option to invest a further £67 million.
Once fully operational the factory will employ 900 people. At its centre will be the tallest building in Scotland (used to coat the wire).
HVDC cables lose only 3 per cent of energy per 1,000km but, with European supply constrained, Xlinks would have to wait at least seven years if it were to rely on existing suppliers. A number of Xlinks’ existing shareholders have invested in XLCC.
The next big hurdle is agreeing a long-term inflation-linked contract, known as a contract for difference (CFD), with Ed Miliband, the energy secretary, to sell at a fixed price the energy that the scheme would produce.
In his three years as chairman of Xlinks, Lewis has seen five energy secretaries come and go and he appears enthusiastic about the new administration and the prospect of some stability. “If you think about where the new government is, and what they’ve said, the scheme absolutely ticks every single box: secure energy supply, lower prices and emissions. Not to mention growth, international investment and jobs. It creates an industry.
“Year one of the link being in operation, wholesale energy prices UK will come down 9.3 per cent.”
Securing a contract with the government, though, is the key to raising the finance needed to start the project. “Through the CFD we’re asking for a commitment from the government to buy the electricity. This allows us to raise the finance at the cheapest rate possible, demonstrating to the market that this model works, not just for this project, but as a blueprint for a global grid.
“We have to deliver: the commercial risk is with us. With government commitment, it then gets 25 years of energy at that price.”
Xlinks is reported to be seeking a strike price of between £70/MWh and £80/MWh. The government agreed a price of £92.50/MWh with EDF for energy produced by the Hinkley Point nuclear power station.
Lewis is equally as enthusiastic about the benefits for Morocco. The scheme, he argues, will demonstrate the potential of the country to become a significant exporter of clean energy.
As well as income from the lease on the solar and wind farm (and a tax on the energy extraction) the scheme would create 10,000 jobs during construction and employ 2,000 people once it was running.
We are chatting in the Science Museum’s newly opened gallery examining the energy transition. The display includes a 1:100 scale model of the ship that XLCC plans to build to lay the cable between Morocco and Devon, as well as a giant solar trough mirror. Lewis reels off facts about both but he freely admits that back in 2021, when Morrish first approached him, he knew nothing about energy.
“They said: that’s great, we know loads about energy, but we have no idea how to talk to the government about this sort of stuff or build the structure of a company.”
Alongside the Xlinks role Lewis has collected the typical roster of jobs for a successful former FTSE 100 chief executive: chairman of the FTSE consumer goods giant Haleon and a non-executive director of PepsiCo.
It is clear, however, that Lewis’s involvement with Xlinks is not just about helping an entrepreneur to turn his audacious scheme into reality. Like his former boss at Unilever, Paul Polman, Lewis clearly feels passionately about the climate and global warming and that businesses can make a difference, particularly in energy and the food system, which account for 67 per cent of emissions.
When he was chief executive, Tesco went into partnership with the conservation charity WWF to understand the environmental impact of the average shopping basket. The retailer later established a measure of that environmental impact and set a goal to halve it by 2030.
After leaving Tesco, following the successful turnaround, Lewis’s first appointment was as chair of the WWF. He has since persuaded almost 90 per cent of the UK grocery industry to adopt Tesco’s target.
“I’m better at making stuff real. There are lots of people who can campaign about this better than I can. I prefer to roll my sleeves up and try to make a positive contribution,” he explains.