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Ofgem says project approved through new fast-track process

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Says safeguards in place to ensure project efficiency

(Adds detail on the project throughout)

By Yadarisa Shabong

Nov 15 (Reuters) - British energy regulator Ofgem has

approved a 2 billion pounds ($2.5 billion) funding package to

build nearly 200 kilometres (124 miles) of new subsea and

underground cables linking Scotland to the north-east of

England, it said on Friday.

The Eastern Green Link 1 (EGL1) project will reduce

Britain's reliance on volatile international gas markets by

further harnessing the power of North Sea wind and will play a

key role in achieving Britain's 2030 clean power goal, the

regulator said.

EGL1 aims to power more than two million homes across

Britain and Ofgem said it could help consumers save more than

870 million pounds in bills annually by cutting the need to

compensate British wind generators due to lack of grid capacity.

The project that will be built by a consortium formed by

Iberdrola's ScottishPower Energy Networks and National

Grid Electricity Transmission is currently nearing the end of

the development phase and construction is scheduled for 2025.

The new connection is anticipated to be operational in 2029.

Ofgem said its fast-track process would give developers

access to some initial upfront funding from the projected budget

so they can secure supply chain commitments.

"However, streamlining our process does not mean we've

handed a blank cheque to the developers. We've built in

safeguards," Ofgem Director of Major Projects Beatrice Filkin

said in a statement.

Of the 196 kilometres of cables, most will be under the

North Sea and the remaining 20 km underground linking the cable

to substations and converter stations in Scotland and England.

Iberdola last year said the first contracts worth 1.8

billion pounds were awarded to the world's largest cable maker

Prysmian Group, which will supply almost 400 km of power cable,

and energy equipment makers GE Vernova ( GEV ) and MYTILINEOS Energy &

Metals, which will provide two High-voltage direct current

substations, one at each end of the cable.

($1 = 0.7891 pounds)