Halcyon days
Our story begins in July 2021, with Tees Valley Mayor Ben Houchen touring the former Redcar steelworks site with BP CEO Bernard Looney. Both men spoke of grand ambitions to create “Teesside’s world-class clean energy hub”. This would include Net Zero Teesside (NZT), confusingly also known as the Northern Endurance Partnership (NEP), a carbon capture project, alongside H2Teesside, a project to create “blue” hydrogen from natural gas.
There’s more
This wasn’t all. On the same site, BP would team up with Equinor to build Net Zero Teesside Power, a gas-fired power station. Then came HyGreen, intended to create “green” hydrogen from renewable energy. So, four massive new energy projects for one world beating site. It sounded too good to be true. I’ve always thought that it was, and I’ve questioned it several times. Here, for example.
The cracks start to show
Bernard Looney resigned from BP over a personal matter in September 2023. His successor, Murray Auchincloss, began to reappraise the company’s renewable investment strategy. In February 2025, Auchincloss announced a pivot from renewables back to oil and gas. A few weeks later, Teesside’s HyGreen project became one of the first casualties of the new strategy.
Singing the blues
Two months after this, in May 2025, BP made it known that it was also considering cancellation of H2Teesside. However, the final decision on this doesn’t seem to have been made. The company is still going through the Development Consent Order process.
Artificial Intelligence
BP’s decision has been complicated by Teesworks’ plan to create an AI Growth Zone on the same site as H2Teesside. The plan, announced in June 2025, would include a 500,000 square metre data centre. These sites almost completely overlap and are shown on the map below, with H2Teesside in yellow and the data centre in grey.
Redcar Blast Furnace
The H2Teesside is slightly larger, and includes the site of the former Redcar Blast Furnace (RBF), whereas the data centre doesn’t. The remains of RBF are still in place, despite promises made in May 2024. The remainder of the H2Teesside/data centre site, marketed by Teesworks as “The Foundry”, is still undergoing remediation.
Procrastination is the thief of time
A planning decision for H2Teesside was due to be made by Energy Secretary Ed Miliband on Thursday 28 August 2025. But, as reported by Leigh Jones in The Teesside Lead, Miliband has now delayed the decision until November.
Whitehall battle
The delay will allow Miliband’s energy department, DESNZ, more time to obtain information on the data centre. But, the previous day, 27 August, the Telegraph reported that Science Minister Peter Kyle’s government department, DSIT, had engaged lawyers to try to block permission for H2Teesside.
We charge by the hour
A friendly reminder that we’ve already got a lot of lawyers involved with this dispute. In July, lawyers for the South Tees Group (STG) wrote to the Planning Inspectorate complaining that BP “had not taken any steps to advance or intensify negotiations with STG in respect of the Proposed (H2Teesside) Development.”
What is the South Tees Group?
The South Tees Group is an umbrella group consisting of Teesworks Ltd (a private company), and the South Tees Development Corporation (STDC), a publicly funded body. The prime movers behind the STG are joint venture (JV) partners Chris Musgrave and Martin Corney. Teessiders will hope that, due to the involvement of the STDC, they won’t be left on the hook for lawyers’ fees and court costs. It can be an expensive business. In the meantime, Ed Miliband has asked STG’s lawyers to provide evidence that another plot of land on the site could be used for their AI data centre.
Drawing a blank
But, I can save everybody the time and expense. There’s no other land available. The only other possible choice would be the 106-acre (429,000 m2) site immediately to the east of the above mentioned site. It’s slightly smaller than the planned 500,000m2 data centre. But, more importantly, if you refer to the map above, you’ll see that this land is reserved for the NZT project. NZT is the flagship of the entire Teesworks project. Ben Houchen has done more photo opportunities there than anywhere else and that’s saying something. It would be a courageous decision to abandon NZT now. He’s in two minds though. He was pitching for the AI Growth Zone at 10 Downing Street back in February 2025.
They’re not making land anymore
So, where else could the AI Growth Zone be located? Teesworks is keen to boast about its 1,450 acres of usable land. But, apart from Redcar, this is split into small parcels in the Lackenby, Dorman Point and South Bank zones. The map below shows how fragmented the Teesworks project is.
There’s a queue
Much of this land has already been allocated to other projects. The Dorman Point zone, for example, will house three of them. These are Willis Sustainable Fuels and Circular Fuels, and the controversial Tees Valley Energy Recovery Facility.
But there’s plenty of water
The Redcar site is served by substantial water mains, first installed 50 years ago as part of the construction of Redcar steelworks. The water mains cross Coatham Marsh just south of Teesworks. These are being partially excavated right now, but it isn’t known whether this is related to Teesworks projects.
Investor confidence
And so, the fight between two government departments, BP, Teesworks, and several teams of lawyers will roll on for at least another three months. Potential investors will delay their decisions. Industrial developers don’t know if their plans will be blocked by the AI Growth Zone. Data centre builders will be wary of hazardous industrial developments next door, so they won’t make a move either. And wait until they discover that there’s no land available.
Running scared
Houchen complained that the Tees Valley Review process had scared away investors. That was possibly true, but the latest fiasco must be doing the same, and this time he’s got nobody else to blame.
Speaking of which…
In the midst of all of the above row, Teesworks has lost another major investor, and nobody seems to have noticed. In June 2024, NatPower announced a plan to build a Battery Energy Storage System (BESS), known as Teesside Gigapark, in Teesworks.
Public consultation
The BESS was planned for the Long Acres zone on the site in Redcar. NatPower began a series of public consultation events in July 2024. I attended one of these events, and reported on it here.
Change of mind
NatPower has since applied to build other Gigaparks, notably Mowbray in North Yorkshire. But there were no further announcements about the Teesside Gigapark until a surprise one on Thursday 28 August. The Teesside BESS will now be built at Wilton International nearby, not Teesworks. NatPower’s announcement gave the impression that this is a completely new project, but it isn’t. The next day, 29 August, it withdrew the application to the planning authority, Redcar and Cleveland Council, for the Teesworks site.
Why now?
So why has NatPower switched their Teesside Gigapark to a site three kilometres away from Teesworks? The decision may have been influenced by the H2Teesside/AI data centre controversy. NatPower’s first preferred site, Long Acres, is only about 500 metres away from the disputed site. However, there could be other reasons. Here’s that map again, with the original Teesside Gigapark site at the top, coloured red, and the new site below, in blue:
Greenfield site
During last summer’s consultation event, NatPower’s spokesman confirmed that he’d been told by Teesworks that the Long Acres site wouldn’t be available for another two years. Unlike parts of the main Redcar site, Long Acres hasn’t been remediated. The new site, on the southern edge of Wilton International, has never been built on, and is good to go. A more detailed site map can be found here.
Electrical connection
The BESS will also be handily connected to the National Grid. It’s next to the site of the former Teesside Power Station, built by Enron in 1993 and closed in 2013. But despite the power station closure, the high voltage connection remains. It’s linked to National Grid’s Lackenby substation, just the other side of the A1053 road.
Private Wire Network
I’d asked NatPower’s spokesman about electricity connections at the previous Teesworks site. I asked him whether he would be using Teesworks’ Private Wire Network (PWN) to connect the BESS to the electricity grid. The spokesman told me that he’d never heard of the PWN, or Steel River Power Ltd (SRPL), the company who will develop it. This will have disappointed the JV partners, Musgrave and Corney, who set the company up with Electricity North West, as announced in October last year. This was exactly the sort of purpose that the company was set up for. But NatPower had agreed that National Grid would construct their electricity connection.
Tunnel
So, if NatPower had kept to their original choice of site, National Grid would have needed to dig a 5-kilometre long “cut-and-cover” tunnel from the BESS to the Lackenby substation. The direct distance is 4 kilometres, but that would have involved tunnelling under Wilton International. This was out of the question due to safety concerns. No tunnelling will be required now.
Hazardous waste incinerator
As part of the planning process for the new Teesside Gigapark, NatPower will need to take note of a potential new neighbour. This is a hazardous waste incinerator, planned for Boundary Road West, about 500 metres from their proposed site. The planning application for the incinerator was refused in January this year, but the applicant, CSG, has appealed, and the decision now lies with the Planning Inspectorate.
Teesside Freeport
Freeport fans will be delighted to know that, although the new Teesside Gigapark site isn’t within Teesworks, it’s still, just like the first site, within Teesside Freeport.
Thanks to James Waterson for providing graphics and additional research for this article
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