UK renewable energy producer Xlinks, noting significant upward pressure on the cost of all energy projects, has warned that construction of the Morocco-UK Power Project could reach $27bn to $30bn, up from the initial $24bn cost plan.

Xlinks head James Humfrey also noted in a statement that the estimated strike price for the project now sits between £70-80/MWh, based on 2012 pricing, citing the unavoidable influence of macroeconomic forces.

The notable increase in global raw material and energy prices and a surge in global demand for renewables stood behind the adjustments, he said, while high interest rates are also playing a role.

“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 explained.

Xlinks however said in an update it is committed to delivering the project. The UK’s Department for Energy Security and Net Zero has yet to approve the pricing mechanism.

The Xlinks green power facility, the largest of its kind in the world, will provide solar and wind energies through four 3,800-km submarine HVDC (high-voltage, direct current) cables, enough to cover energy needs for seven million UK homes for nearly 20 hours per day by 2030.

Once online, the cable is expected to cover 8% of the UK’s national electricity needs. The subsea cable, which will cost $1.7bn alone, is projected to have the capacity to transfer 10.5GW of green electricity produced in Morocco’s Guelmim-Oued Noun region.

The total 10.5GW capacity will originate from seven GW of solar sources and 3.5GW from wind. The project attracted investments from TotalEnergies, Octopus Energy, and Abu Dhabi National Energy Company (TAQA).