British energy regulator Ofgem has approved a £3.4bn provisional funding package for Eastern Green Link 2 (EGL2), a 2GW subsea and underground electrical cable link to be built between Scotland and Yorkshire.

EGL2 will stretch from Peterhead in Aberdeenshire to Drax in North Yorkshire; 436km of the cable will be laid under the North Sea while the remaining 70km will be underground onshore.

EGL2 includes the construction of two converter stations to facilitate the integration of the transmitted electricity into the national grid.

National Grid Electricity Transmission and Scottish and Southern Electricity Networks Transmission formed a joint venture in July 2023 to develop the link.

EGL2 will capitalise on Britain's offshore wind energy potential and is funded by the developers, with the costs to be recovered through consumers' bills.

Ofgem has reviewed the financial projections submitted by the developers under its new fast-track Accelerated Strategic Transmission Investment (ASTI) process to ensure that costs to consumers are kept to a minimum.

During its scrutiny process, Ofgem identified potential savings of £67m ($84.47m) in indirect costs that would not affect the quality or delivery of the project.

The ASTI framework, which aims to expedite strategic energy projects, allows for the faster delivery of electricity generated by offshore wind to British consumers, potentially accelerating the funding process by up to two years.

EGL2 was among 26 projects deemed crucial for the government's target of 50GW of offshore wind capacity by 2030.

Ofgem major projects director Rebecca Barnett stated: “Eastern Link 2 is the second project to reach this stage under our new ASTI process, which has been designed to boost Britain’s energy security by unlocking investment and speeding up the delivery of major power projects.

“[But] just because we have streamlined the approval process doesn’t mean we are handing developers blank cheques. The ASTI framework helps ensure consumers are protected from unnecessary costs and we make budget adjustments where we don’t see maximum efficiency and benefit for consumers.”

In February 2024, Italian cable manufacturer Prysmian was awarded a €1.9bn contract for the EGL2 project.

Prysmian is responsible for the design, manufacture, installation, testing and commissioning of the cable system, which will utilise extruded cross-linked polyethylene insulation.