The Teesside Gigapark is a proposed Battery Energy Storage System (BESS) to be built by NatPower at the Long Acres site in Redcar. A BESS is a means of storing surplus energy from the National Grid at periods of low demand, then feeding it back into the grid during peak loads. The energy is bought at a low price, and sold back at a higher price. It could be considered a form of arbitrage.
Consultation
NatPower is holding a consultation event on the Teesside Gigapark at St. Hilda’s Church in Redcar from 26 June until 19 July. I attended the first day of the consultation.
What is NatPower?
NatPower is a recent start up in the UK. It’s owned by a venture capital firm based in Luxembourg. But large-scale BESS systems have a history of failure in the UK, so NatPower will be hoping for a lucky break. And they will need it. As the name suggests, the Teesside Gigapark will have a capacity of 1 Gigawatt (GW) and will cost £1bn to build. NatPower intends to build out 60GW of BESS capacity in the UK, which would require a total investment of £60bn. They are ambitious. There are many small-scale BESS plants already operating successfully in the UK, even down to a domestic scale using feed-in tariffs (FITs). FITs are an excellent scheme whereby home-owners can feed surplus renewable energy into the electricity grid. FITs are so good that the Conservative government closed them to new applicants in 2019. But none of the existing BESS plants are anywhere near the scale of the proposed Teesside Gigapark which, if built, will be the largest in Europe.
National Grid curtailment payments
The UK government issued lots of permits for offshore wind farms, but didn’t upgrade the National Grid or invest in battery storage at the same time. Therefore, when wind speeds are high, the wind farms supply more energy than the grid can cope with, and their supply to the grid is cut off. National Grid has to compensate them for this, using a mechanism called curtailment. National Grid paid out £1bn in curtailment costs last year. All of these costs eventually find their way into our electricity bills. If there were sufficient BESS facilities in place, so the theory goes, the wind farm companies could sell their surplus electricity to companies such as NatPower, so it wouldn’t be wasted, and they wouldn’t need to claim compensation payments from National Grid.
Lithium
Teesside Gigapark, and all of the others, will need a lot of lithium for their batteries. There have been lots of proposals for batteries that don’t use lithium, but these are all nonsense. You’re going to need lithium, but it’s in short supply worldwide as Tesla and other large EV manufacturers scour the world for it, and the shortage is worsening. Teesside readers may remember a company who was going to import lithium from Africa to a new plant at Wilton, but it was never a realistic proposition. Up in Weardale, County Durham, a company called Northern Lithium is excited about brine reserves under the Pennines, but the British Geological Survey doesn’t seem so keen, and the area doesn’t even feature in their map of potential raw materials sites.
Local connections to the National Grid
Teesside Gigapark hasn’t yet decided on the location of the electricity substation that will be needed to connect to the local electricity grid, but power will need to be fed from here to the Lackenby substation near Eston. This will be sent, firstly, via a utilities corridor being built by Teesworks Ltd to connect their main sites at Redcar, Dorman Point and South Bank. The utilities corridor will be built parallel to the Darlington to Saltburn railway line, based on a pipeline network built by ICI seventy years ago. The Long Acres site is adjacent to the railway, and will be adjacent to the utilities corridor, if it is ever built. In addition to electricity cables, the corridor is intended to contain carbon dioxide and hydrogen pipelines. It already contains oxygen pipelines, but these are probably redundant. If I were NatPower, I would be very concerned about any slippage in the construction timeline for this utilities corridor, and also any leasing costs associated with it. Teesworks Ltd is notorious for failing to meet their own deadlines. But NatPower will still need to build their own high voltage transmission line between South Bank and the Lackenby substation.
Onward connections to the National Grid
In order for the Teesside Gigapark to work effectively, the high voltage transmission line from Lackenby to Osbaldwick, on the outskirts of York, will also need to be upgraded. Tees Valley Mayor Ben Houchen has complained about this grid connection in the past, notably at the Tory Party Conference in 2022, but nothing has been done. NatPower confirmed that they will need to make a financial contribution to this upgrade. The last time that this power line was upgraded, 20 years ago, there was massive local opposition to it. It will be a long time before this high voltage transmission line upgrade is complete.
Remediation of land at Long Acres
NatPower confirmed to me that the land needed for the Teesside Gigapark won’t be remediated until July 2026. This is contradictory to numerous press releases from Ben Houchen, the TVCA, the STDC and Teesworks Ltd, which give the impression that land remediation at the former Redcar steelworks site is complete. For example, Houchen was boasting about this as long as four years ago. Long Acres is adjacent to the former Redcar Steelworks site. But, importantly, Long Acres is on the site of the former Slag Wool Works, not on the site of the modern Redcar steelworks built by British Steel in the 1970s. The Slag Wool Works used slag supplied by the Redcar Iron and Steel Works, the forerunners of the modern steelworks. It was demolished in 1976. There may be a specific issue with remediation related to this site but, if there are any, they have never been publicly disclosed.
Timeline for Teesside Gigapark
NatPower is hoping to have Phase I open by 2028. Phase I will be able to feed up to 1GW of electricity into the grid over 4 hours. When two further phases have been completed by 2035, the length of supply availability will be extended to seven hours. NatPower will be leasing the site from Teesworks Ltd. Teesworks is 90% owned by four joint venture partners, Chris Musgrave, Martin Corney, Ian Waller and Chris Harrison. The Teesside Gigapark would therefore potentially provide yet another income stream for these four men, who are already very wealthy. NatPower says that it is not seeking any grant or subsidy payments to build Teesside Gigapark.
HyGreen Teesside
I asked NatPower about a potential rival project for the Teesside Gigapark. This is HyGreen Teesside, a proposal by BP plc to build a green hydrogen plant in Teesside, fed by surplus renewable energy, notably electricity from the Dogger Bank C wind farm, which will be brought ashore between Redcar and Marske. The electricity would be converted to green hydrogen which would be stored, then burned, to generate electricity at peak times. The proposed capacity of HyGreen is 80MW, so Teesside Gigapark would be 12.5 times larger. NatPower told me that, under current legislation, HyGreen would run into problems. Hydrogen is so volatile that you are not allowed to store more than four tonnes of it in any one place. This would only be enough to supply 132MWh of electricity, an insignificant quantity. This is never mentioned in Houchen’s press releases. It’s very unlikely to matter though, because the chances of HyGreen Teesside ever being built are very remote.
A green deal for greenbacks
But ‘green’ NatPower has come to the rescue, right? No, they are venture capitalists who have seen a gap in the UK energy market. An opportunity for yet another tax-haven based company to extract a lucrative long-term income stream from UK taxpayers. And it can get a lot worse than this, for example when the Macquarie Group bought Thames Water. Macquarie stripped away £1.65bn in profits in a decade then walked away, leaving debts of £16bn to be picked up by the UK taxpayer. If the Macquarie name sounds familiar, that’s because it’s the same company that paid £75 million to the Teesworks Ltd joint venture for the lease on South Bank Quay in Teesside Freeport, in order to set up yet another income stream. And yes, South Bank Quay is the same place that Houchen gave to Teesworks Ltd for £1 an acre.
We really shouldn’t put up with this stuff anymore.
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