Energy giant SSE plc, now accepts it can lay a 100 miles subsea cable from Caithness to Moray for £118m less than it had originally calculated.
SSE's Scottish Hydro Electricity (SHE) Transmission Ltd had applied to Ofgem for permission to charge its customers £1,236.2m to finance the project. But the regulator said in October the cost would be £1,062.3m. However in December the regulator agreed the cost would be more, some £1,118m in total.
The link is planned to carry 1.2 gigawatts of green energy to the grid from planned wind, wave and tidal projects in the north of Scotland.
Confirmation of funding arrangements is expected to bring SHE Transmission's total investment in the north of Scotland's network for the next financial year to around £600 million
David Gardner, SSE's Director of Transmission, said: "The investment of around £600m for financial year 2015/16 will see work commencing on the vital Caithness-Moray subsea link, along with further investment in a number of other approved projects, all unlocking renewable sources of energy for decades to come.
"Importantly, local people will benefit from the hundreds of jobs it will support, with more than 100 apprentices and graduates being trained with the vital engineering and technical skills needed to serve the network across the North of Scotland in the future."
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