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National Grid has taken a step towards building Britain’s biggest electricity substation on Teesside, which could supply power to a vast neighbouring datacentre as the UK races to expand its AI infrastructure.
Land Acquisition at Teesworks
Last week, the company agreed to purchase 29.5 hectares of land at Dorman Point on a site owned by Teesworks, a local private-public partnership. The agreement followed reports last year that the UK government had picked Teesworks as the site for a new artificial intelligence datacentre, with planning applications submitted for a project spanning nearly 500,000 square metres.
Matt Pearce, the head of land at National Grid, stated that the deal reflects constructive collaboration to enable vital infrastructure. He added that the project will support the growth of AI and digital technologies while enabling the region’s next phase of industrial and economic development, noting a commitment to working with partners to progress the development quickly.
Power Capacity and AI Competition
Ben Houchen, the mayor of the Tees Valley combined authority, told Sky News that securing enough power quickly is the biggest challenge for building a datacentre in the country. He noted that while the UK has been stuck in a queue, the US, the Gulf, and parts of Europe have been securing investments, and having up to 3.2GW of capacity in Teesside allows the region to compete for those projects.
Houchen added that if Britain wants its own AI capability with sensitive data stored on British soil, it needs physical space for it, preferring Teesside over Texas or Abu Dhabi.
Government Policy and Public Opposition
Last week, the government published a draft national policy statement on datacentres, describing them as fundamental to the economy. The statement emphasized the need to take control over datacentre development and ensure the country and host communities benefit from them.
However, rapid datacentre construction faces strong opposition, with campaign groups protesting planned developments in locations from Auchtertool near Edinburgh to Brick Lane in east London. In October, The Guardian reported that AI companies warned ministers they had 12 months to head off public opposition or risk US-style protests threatening construction.
Balfour Beatty was reported to be in line to deliver the Teesworks substation for National Grid, alongside utilities firm Steel River Power, with both companies approached for comment.
