Subsea power cable specialist XLCC has won multi-million pound official backing for a plan to develop a plant in Scotland which renewables industry leaders said would spur growth in the country’s green economy.
XLCC is set to receive up to £87 million funding from the UK Infrastructure Bank to help develop what the institution described as a new world-leading factory in Ayrshire.
The bank said the plant will have the capacity to produce thousands of kilometres of leading edge high voltage cables a year.
If XLCC achieves its ambitions, the plant could provide a big boost for an area which has been hit hard by the decline of industries such as coal-mining over the years.
The plant will be developed on the site of the former coal terminal at Hunterston, which closed in 2016.
XLCC has said it expects to employ 900 people at the plant, which could also support thousands of supply chain jobs. Up to 1,100 will work on the construction phase. This is due to start next year.
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Scottish Renewables said the funding deal would provide a shot in the arm for Hunterston and Scotland’s wider renewable energy supply chain.
“Building the advanced manufacturing capabilities here in Scotland for renewable energy is crucial for securing the highly skilled jobs and vital inward investment needed for our just transition,” said Colin Palmer, director of offshore at the trade body.
News of the investment comes soon after the Scottish Government highlighted the potential for Scotland to become a major player in the global market to support the development of offshore windfarms.
Wind was one of the five opportunity areas identified in the Green Industrial Strategy that was announced this month.
The new UK Government has put the development of renewables and related industries at the centre of its plans to boost economic growth. The effort will be led by the new Great British Energy organisation. Keir Starmer confirmed this week that GB Energy will be based in Aberdeen.
READ MORE: Is Ayrshire key to Scotland becoming a green industrial powerhouse?
The UK Infrastructure Bank yesterday underlined the potential scale of the market to provide cables, which could be key to maximising the potential of windfarms.
“Subsea HVDC cables built at Hunterston will be capable of transporting energy over long distances with significantly increased efficiency,” said the bank.
“As such, they will play a fundamental role in the upgrade of the grid required for the energy transition. This will enable the connection of renewables at scale and allow the clean energy produced by wind farms in the North Sea to be transported to homes and businesses around the country.”
UKIB chief executive John Flint noted: “Industry projections indicate that demand for subsea cables will soon exceed existing supply chain capacity.”
He added: "Our support for XLCC is intended to provide confidence to the market, crowding private investment into this sector to boost production capacity in an industry set to have a significant impact on the UK‘s transition to net zero.”
Japanese giant Sumitomo is developing a high voltage cable plant at Port of Nigg on the Cromarty Firth.
XLCC chief executive Ian Douglas praised the infrastructure bank for having the foresight to recognise the opportunity to create a new force in high voltage cables to address what will be long-lasting domestic and global requirements.
“The creation of the Hunterston facility in Scotland brings significant investment to the UK, creating highly skilled jobs in advanced manufacturing and project management for decades to come,” said Mr Douglas.
Other investors in XLCC supported the funding round. Entrepreneur Simon Morrish has a significant stake in the business.
Mr Morrish runs XLinks which is working on plans to transport renewable energy generated in Morocco to the UK by subsea cable.
In 2021, XLCC acquired an option from Clydeport-owner Peel Ports to take over the site at Hunterston. It was reported then that the site would be fully operational in 2024.
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XLCC said it chose Hunterston because it offered access to a deep-water port and a large area of land.
A spokesperson for XLCC said yesterday that full commercial production was expected to start in 2030.
The company was granted planning permission for the plant in May last year. It secured £9m funding from Scottish Enterprise in November.
UKIB will invest an initial £20m. It has an option to invest a further £67m upon XLCC achieving specific development and funding milestones.
The Leeds-based bank was launched by the former Conservative Government in 2021. It has £22 billion capital to deploy.
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