Ofgem’s decision means Scottish Hydro Electricity Transmission (SHET) – a subsidiary of utility SSE – can move ahead with the £1.2bn Moray project, which is set for completion during 2018.

The regulator said the link between Caithness and Moray in northern Scotland is needed to “help meet Britain’s renewable target at a lower cost to consumers”.

SSE – which applied to Ofgem to build the link in April 2013 – said: "We will now work with Ofgem on the remaining details and focus on ensuring that the new link is constructed in a safe and responsible way so that the benefits it will bring in unlocking renewable sources of energy for decades to come are realised."

Ofgem