The UKIB's initial investment of £20 million demonstrates its commitment to working with private investors to achieve the UK's ambitious net zero goals. The factory will play a vital role in strengthening domestic supply chains for essential components like HVDC cables, which are crucial for connecting renewable energy sources to the grid.
The Bank's financing, combined with additional investment from existing and new investors, will enable XLCC to establish a factory in Hunterston with the capacity to produce thousands of kilometres of HVDC cable annually. This project is expected to create around 900 permanent jobs, including over 200 apprenticeships, contributing to the growth of the UK's manufacturing sector and offshore wind industry.
The subsea HVDC cables produced at the Hunterston factory will be instrumental in transporting renewable energy over long distances, enhancing grid efficiency and strengthening energy security. By connecting wind farms in the North Sea to homes and businesses across the country, the factory will contribute to decarbonisation and reduce reliance on fossil fuels.
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The UK Infrastructure Bank's investment aligns with its twin missions of addressing climate change and supporting regional economic growth. The project has received positive support from the industry regulator, Ofgem, which recognises the importance of increasing domestic capacity for critical infrastructure and accelerating the supply chain for grid projects.
John Flint, UK Infrastructure Bank’s CEO, said: "Industry projections indicate that demand for subsea cables will soon exceed existing supply chain capacity. 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."
Ian Douglas, XLCC’s CEO, said: "XLCC's mission is to provide critical elements of the infrastructure that is essential to the energy transition and will reduce project costs to the benefit of the UK consumer. 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. We welcome the foresight of UKIB and our other investors in recognising the opportunity to create a new force in HVDC cables to address both domestic and global requirements."
Jonathan Brearley, Ofgem CEO, said: "Britain is seeing the biggest transformation of the energy grid for decades. It will have long-term benefits for us all – true energy security, cutting emissions and protecting consumers. It demands unprecedented levels of public-private investment in clean power, so we welcome the UKIB’s commitment today to green industry, jobs and growth."
