The link would allow new wind farms on Shetland to export renewable electricity to the rest of Great Britain and help ensure supply of electricity on the islands.

Ofgem’s approval is subject to receiving sufficient evidence by the end of 2020 that the 457MW Viking Energy Wind Farm project planned for Shetland is likely to go ahead.

The energy regulator said revised proposals were welcome when it rejected the £700 million plans in October last year. It was unable to approve SSEN’s original proposal for the link because the Viking Energy Wind Farm project had failed to win a subsidy in the UK Government’s Contract for Difference Auction.

SSEN submitted its revised proposal in January, taking account of updated progress of planned windfarms, as well as potentially increased electricity demand on the Shetland Isles.

Ofgem will now carry out a final consultation on today’s minded to approval announcement.

Jonathan Brearley, chief executive of Ofgem, said: “Ofgem’s immediate focus is to support the energy industry so it can respond effectively to the COVID-19 pandemic and ensure consumers, especially the vulnerable, are protected.

“Today’s announcement will help stimulate economic growth as the economy recovers from COVID 19, as well as unlocking Shetland’s potential to supply low cost renewable electricity for consumers across Great Britain.” 

Ofgem has given conditional approval to a transmission link in Orkney and has approved the Hinkley-Seabank and Caithness-Moray links.