The two-year delay made it difficult at times for renewable energy generators in Scotland to export clean electricity to England and Wales, Ofgem said.
Both National Grid and SPT have been jointly blamed for the late delivery of the Western Link Project and the £158m fine will be used to lower household bills.
£15m will be paid into Ofgem’s Redress Fund which is operated on its behalf by the Energy Saving Trust and allows companies to pay a sum of money to appropriate charities, trusts, organisations or consumers as a result of breaches of licence conditions.
The remainder of fine will be returned via reduced system charges that are ultimately paid for by consumers as part of their overall electricity bills.
Western Link is a transmission project worth around £1.2bn, providing a major subsea electricity link between Scotland and Wales. The link is 422km long, of which 385km is under water.
It was designed to transport electricity, often from green sources...