National Grid buys land for UK’s largest substation near Teesside datacentre

National Grid has secured the land required to construct the United Kingdom’s largest electricity substation on Teesside. The facility is intended to supply power to a massive neighbouring datacentre, a move that aligns with the country’s broader efforts to expand its artificial intelligence infrastructure. This development marks a significant step in providing the necessary energy capacity for large-scale digital projects in the north-east of England.

The utility company agreed last week to purchase 29.5 hectares of land at Dorman Point. The site is owned by Teesworks, a local private-public partnership. This acquisition follows reports from the previous year indicating that the UK government had selected Teesworks as the location for a new artificial intelligence datacentre. Planning applications have already been submitted for the project, which is expected to span nearly 500,000 square metres. The new substation will be critical in enabling the region to attract investment for such large-scale AI infrastructure.

Matt Pearce, head of land at National Grid, stated that the deal reflects constructive work by all parties to enable vital infrastructure. He noted that the project will support the growth of AI and digital technologies, facilitating the next phase of industrial and economic development in the region. Pearce added that the company is committed to working closely with partners to progress the development as quickly as possible. The timing of the purchase is significant as it addresses a key bottleneck in the sector, which is the availability of sufficient power to support new digital facilities.

Ben Houchen, mayor of the Tees Valley combined authority, highlighted the competitive advantage the new capacity provides. He noted that while the UK has faced delays in securing power for datacentres, regions in the United States, the Gulf, and parts of Europe have continued to attract investment. With up to 3.2 gigawatts of capacity available, the region can now compete for major projects. Houchen argued that for Britain to maintain its own AI capability and keep sensitive data on British soil, it requires physical locations for such infrastructure, preferring Teesside to international alternatives.

The government recently published a draft national policy statement describing datacentres as fundamental to the economy, comparable to railways and electricity networks. It emphasised the need to control their development to ensure benefits for the country and host communities. However, rapid construction has faced strong opposition, with protests in locations ranging from Auchtertool to Brick Lane in east London. In October, it was reported that AI companies warned ministers they had 12 months to address public opposition to avoid US-style protests. Balfour Beatty is reported to be in line to deliver the substation, with Steel River Power also heavily involved in the project.