Plans to upgrade a major tunnel under the Thames, which is used for vital electricity infrastructure between Kent and Essex, have been approved.

The Grain to Tilbury project forms part of a National Grid project aiming to develop the necessary infrastructure to connect 50GW of offshore wind to the grid by 2030 – enough energy to power every home in the country.

It will run under the Thames, between the towns of Tilbury and Gravesend, and replaces the existing Thames Cable Tunnel which is more than 50 years old, having been built in 1969, and is coming to the end of its operational life.

The project involves the construction of a new 2.3-kilometre tunnel beneath the river, the installation of new cabling, and new headhouses at each end for access.

In Gravesend, this facility will be within a vegetated area which is part of National Grid-owned land in the Canal and Grazing Marsh, Higham.

Cable-sealing end compounds will also be installed to connect the new underground cable to the wider electricity network.

Spanish firm Ferrovial has secured the contract for the project, worth approximately £230 million.

Following planning approval from both Gravesham and Thurrock councils, construction is now under way and is expected to be complete in 2029.

Mark Farmer, Grain to Tilbury project director, said: “We are delighted our planning applications for the Grain to Tilbury project have been approved, and this marks a significant step forward in upgrading electricity infrastructure in the region.

“We look forward to progressing with the next stages of the project and continuing to work closely with local communities and stakeholders.”

The project forms part of the National Grid’s “Great Grid Upgrade”, which it says represents the most significant overhaul of the UK’s electricity network in decades, and is aimed at enhancing the reliability and capacity of the country’s power supply.

On November 14, the company issued a compulsory purchase order (CPO) to enable it to acquire the land and rights necessary for the delivery and operation of the project.

A consultation on the CPO lasted until December 20.

National Grid said its preference has always been to secure land and new rights to enable construction and operation of the project by voluntary agreement.

However, while it says “good progress” has been made in agreeing terms for private agreements, it has not to date secured all of the land and rights it requires, and so it was necessary to issue the CPO.

Those affected have been informed and the CPO will be submitted to Ed Miliband, the Energy Secretary for confirmation.

Depending on the number and nature of objections received to the CPO, the Secretary of State may decide to hold an inquiry at which an inspector will hear evidence from both National Grid and any objectors before making a recommendation as to whether the CPO should be confirmed.

It comes as the government plans to publish major new legislation today (March 11) giving communities living near major energy infrastructure projects discounts.

Under the proposals, those living near new electricity pylons could receive up to £250 a year off their energy bills for 10 years.

Those living near onshore, above-ground transmission cables and other related infrastructure, such as substations, are expected to be covered by the scheme, as Labour seeks to meet its pledge of clean power by 2030.

Energy Secretary Ed Miliband said: “The truth is our country remains in the grip of fossil fuel markets controlled by petro states and dictators.

“That’s why your energy bills are so high.

“There is an answer, clean homegrown power that we control. But to bring it to people’s homes we need to build the transmission infrastructure to make that happen.

“Now we believe that if you live close to that new grid and infrastructure you should see direct benefit in your energy bills.”

He added: “I know this won’t satisfy everyone but it is a recognition that if you host clean energy infrastructure, you should benefit from it.”

However, campaigners have warned the scheme could lead to disparities in government support between households living near such projects in rural communities and those located greater distances away.

There are also concerns discounts for such schemes will only be secured by small bill increases for millions of other customers.