Teesside set to host massive substation to power AI datacentre

Last week, the company finalized the purchase of 29.5 hectares (73 acres) of land at Dorman Point, a site managed by Teesworks, a partnership between private and public entities. This acquisition, initially reported by Sky News, follows the UK government’s selection of Teesworks for a new AI datacentre project, which is expected to cover nearly 500,000 square meters.

Matt Pearce, head of land at National Grid, emphasized the collaborative effort behind the deal, stating it “reflects the constructive work between all those involved to enable this vital infrastructure… and will support the growth of AI and digital technologies, and enable the region’s next phase of industrial and economic development.” He added, “We are committed to working closely with our partners to progress the development as quickly as possible.”

According to Tees Valley Combined Authority Mayor Ben Houchen, securing sufficient power supply has been a significant hurdle for datacentre development in the UK. “Everyone who has tried to build a datacentre in this country knows the biggest problem is getting enough power to the site quickly,” Houchen told Sky News. He highlighted the importance of the 3.2GW capacity to compete for investment, contrasting the UK’s progress with that of countries like the US and Gulf nations. “If Britain is serious about having its own AI capability, with sensitive data stored safely on British soil, it needs somewhere to physically put it, and I’d much rather that was Teesside than Texas or Abu Dhabi.”

The government recently released a draft national policy statement on datacentres, drawing parallels to essential infrastructure like railways and electricity networks. The statement asserts the need to “take control over the development of datacentres in this country and ensure that the country and host communities benefit from them.”

Despite government support, the rapid expansion of datacentres faces resistance. Protests have emerged across the UK, from Auchtertool near Edinburgh to Brick Lane in London. Concerns about the environmental and social impact of these facilities have prompted calls for greater scrutiny.

Reports in October indicated that AI companies warned government officials of potential US-style protests if public opposition to datacentre construction isn’t addressed within a year. Balfour Beatty is reportedly positioned to construct the substation for National Grid, with Steel River Power (SRP) also playing a key role. Both Balfour Beatty and SRP were contacted for comment.