Teesworks battle brewing as hydrogen and AI plans compete

A battle is brewing between two major emerging technologies for a former steelworks site.

BP is seeking a development consent order (DCO), which is required for nationally significant infrastructure projects, for a blue hydrogen plant on the Teesworks site in Redcar.

If approved, with the government set to make a decision by 28 August, it would give BP the power to compulsorily purchase the land it needs.

But the landowners, South Tees Group, have different plans for the site and want to build a giant AI data centre on it instead, which has been approved by the local council.

The Teesworks site, which is one of the biggest brownfield regeneration sites in Europe, is run as a joint venture between the publicly-owned and funded South Tees Development Corporation, led by the Tees Valley Combined Authority (TVCA), and two Teesside businessmen, Martin Corney and Chris Musgrave.

The men initially owned 50% of the shares of Teesworks, but that was raised to 90% in 2021, with the remaining 10% staying in public hands.

In June, South Tees Group (STG), the collective name for the venture behind Teesworks, submitted a planning application to Redcar and Cleveland Borough Council seeking to build a data centre on 123 acres (50 hectares) of its land.

The data centre would be housed on a specific patch of land that BP had already earmarked for its hydrogen plant – H2Teesside.

In a letter detailing its opposition to BP’s plans, STG’s team claimed the proposed data centre was of “critical national importance” and they were in “advanced discussions” with a prospective occupier.

In opposition to STG’s plans, BP’s team wrote in a letter that H2Teesside was of “national significance” and would provide a “significant contribution” to the UK’s net zero targets.

“A data centre would not deliver comparable levels of public benefit,” it said.

BP said the plant would be one of the UK’s largest blue hydrogen facilities and represent more than 10% of the government’s hydrogen production target by 2030.

Blue hydrogen plants split natural gas into hydrogen and carbon dioxide.

BP had asked the local authority to wait until the government had made its decision over H2Teesside before it considered STG’s data centre plans.

But on Friday, the council approved STG’s plans for the data centre.

BP said it would “now take the time to consider this decision in line with our proposals”.

It is unclear what may occur next.

BP said it had been seeking to find a position of “co-existence” with STG over both their aspirations for Teesworks.

“[We remain] willing to continue those discussions on proposals that would enable both developments to co-exist,” a spokesperson said.

Teesworks said its focus remained on job creation, long-term economic growth and “generating positive outcomes for the local community”.