Giant cable factory plans stalled in Scotland after Xlinks setback

Plans for a major high voltage cable factory in Scotland have been halted following the UK government’s rejection of the ambitious Xlinks undersea energy project. XLCC, the company behind the proposed plant at the Port of Hunterston in North Ayrshire, has announced a strategic reset, including cost cutting and staff reductions, as the outlook for the subsea cable market shifts significantly. Six redundancies have already taken place as part of these restructuring efforts.

The company cited shifting market conditions, namely the delay, downsizing or outright cancellation of several major infrastructure projects. Surging construction costs have led to the abandonment of a number of planned offshore wind farms. Of particular note is the impact of the £25bn Xlinks project being rejected. This initiative, led by former Tesco chief executive Sir Dave Lewis, would have connected UK energy demand directly to solar and wind output in Morocco with a 2,500 mile subsea cable. Despite assertions from XLCC that Xlinks was not fundamental to its business case, industry insiders suggest this government decision was a major contributing factor to the factory pause.

The future of UK cable manufacturing has also been affected by the National Grid’s choice to award the Sea Link cable project to Japanese company Sumitomo Electric Industries. This decision will see a competing factory established at Port of Nigg, thereby intensifying pressure on domestic manufacturers such as XLCC.

Planning approval for the Hunterston plant had been granted, with XLCC aiming for operations in 2028 and investment support from both the National Wealth Fund and the Scottish National Investment Bank. The factory would have supplied critical undersea cables for offshore wind farm connections and for national electricity interconnectors.

A spokesperson for XLCC highlighted a growing gap between cable supply and demand that poses a potential bottleneck for the energy transition. The company remains intent on developing a world class high voltage cable manufacturing base in Scotland, but has determined that a pause is now inevitable until market orders materialise and strategic reviews are completed. XLCC will update stakeholders as the review concludes next year.

The Department for Energy Security and Net Zero confirmed that discussions with cable manufacturers, including XLCC, are continuing, with the aim of accelerating investment and building robust domestic supply chains for Britain’s green energy future.