UK’s Office of Gas and Electricity Markets (Ofgem) has proposed £1.1bn ($1.8bn) of funding for the new subsea electricity cable to connect the north of Scotland.

The Moray Firth subsea cable with be installed by Scottish-based firm SSE. The funding for the project however is £173.9m less than the £1.24bn estimate requested by SSE’s Scottish Hydro Electricity Transmission (SHE Transmission) unit.

Taljking about this, a company spokesman for SEE was quoted by Scotsman as saying: "While SHE Transmission is disappointed with the level of the allowances proposed today, the consultation does enable further engagement with Ofgem to take place on important issues, such as the best way for treating contingency and risk-related costs."

"The consultation enables further engagement with Ofgem to take place on important issues."

Expected to be complete by 2018, the proposed link will connect nearly 1.2GW of renewable power generation on either sides of the Moray Firth, boosting the UK’s power supply.

The allocated budget is expected to ensure that ‘consumers pay no more than necessary’, the UK regulator said in a statement. The funding proposal is open for consultation for four weeks however, with the final decision being made in December.

Ofgem approved installation of the 100-mile underground and subsea connector between Caithness and Moray in July this year.

SSE has claimed that the project will be the largest investment in the north’s electricity network since the 1950s.