Key facts
- National Grid agreed to buy 73 acres at Dorman Point from Teesworks, a local private-public partnership.
- Matt Pearce, National Grid's head of land, said the deal will support growth of AI and digital technologies.
- Tees Valley mayor Ben Houchen said the site could have up to 3.2GW of capacity.
- Planning applications were submitted for a datacentre of nearly 500,000 square metres at Teesworks.
- Balfour Beatty was reported to be in line to deliver the substation, with Steel River Power also involved.
- The government's draft policy statement called datacentres as fundamental to the economy as railways and electricity networks.
National Grid agreed last week to buy 73 acres of land at Dorman Point on Teesside from Teesworks, a local private-public partnership, moving toward building Britain's largest electricity substation. The site could supply power to a large neighbouring datacentre. Sky News first reported the deal.
The land sits where the UK government picked Teesworks as the site for a new artificial intelligence datacentre, following reports in 2025, and planning applications were submitted for a project of nearly 500,000 square metres. Matt Pearce, National Grid's head of land, said the deal "reflects the constructive work between all those involved to enable this vital infrastructure" and will support growth of AI and digital technologies.
Ben Houchen, the Tees Valley combined authority mayor, told Sky News that getting enough power to a site quickly is the biggest problem for datacentre builders in the country. He said having up to 3.2GW of capacity at Teesside would let the region compete for projects, adding that Britain needs somewhere to physically put AI infrastructure.
The government published a draft national policy statement on datacentres, describing them as "as fundamental to our economy as the railways and electricity networks on which we have long depended." It said the country must take control over datacentre development and ensure host communities benefit.
Rapid datacentre construction in the UK has drawn opposition, with campaign groups protesting planned developments from Auchtertool, north of Edinburgh, to Brick Lane in east London. In October, the Guardian reported that AI companies told ministers they had 12 months to head off public opposition or risk US-style protests that could threaten construction.
Balfour Beatty, the London-listed infrastructure services group, was reported to be in line to deliver the Teesworks substation for National Grid, with Steel River Power also heavily involved. Balfour Beatty and Steel River Power were approached for comment.