"Clears the way": Ben Houchen hails major decision in battle for £100bn AI data centre scheme
Tees Valley mayor Ben Houchen says the path for potentially “the biggest private investment Teesside has ever seen” has been cleared after a rival plan to a huge AI data centre scheme was dropped.
BP has confirmed it is dropping its efforts to build a blue hydrogen production facility called H2Teesside which had sought to produce 10 per cent of the UK’s hydrogen, assisting with the country’s decarbonisation aims – but would have used the same Teesworks brownfield site that had also been earmarked for an alternative data centre facility.
A Government decision had been due on whether the BP scheme could go ahead had been due this week but H2T formally withdrew its application on Monday following planning permission being granted by Redcar and Cleveland Borough Council for the rival data centre plan.
Lord Houchen, who told the Sunday Times earlier this year that the AI data centre plan had far greater economic potential than the hydrogen scheme and could bring in “north of £100 billion worth of investment”, has welcomed the BP decision.
He said: “The decision clears the way for what could be the biggest private investment Teesside has ever seen - bringing thousands of high-quality jobs and putting us right at the heart of the UK’s fast-growing AI and tech industry.
"BP’s hydrogen project faced a number of challenges, and while I know this won’t have been an easy decision, I welcome their pragmatism. We’ll continue working closely with BP to deliver their world-first £4 billion NZT carbon capture scheme - a critical part of Teesside’s industrial future.
"Land on the former steelworks site is limited, and investor interest is high. We’ve got a responsibility to make sure it’s used to deliver the biggest possible benefit for local people. A cutting-edge data centre will create more long-term jobs, attract more investment and deliver greater future-proof growth than any alternative. This is absolutely the right move for Teesside.
"Now we have clarity, we can get on and deliver. From ICI to AI, Teesside powered the first Industrial Revolution, and now we’ve got the green light to lead the next one.”
Google is among those reported to be in talks about joining the project. A planning permission application was submitted in June by Teesworks Limited, the public-private partnership developing the site.
BP said its application was withdrawn following the granting of the planning application.
A letter from H2Teesside sent to the Government said: “While we maintain that a solution which enabled co-existence of both H2T and the proposed data centre on the Teesworks estate could have been identified, we note that the latter has the support of the Redcar and Cleveland Borough Council, who have awarded the primary consent that would be required for the data centre development to proceed.
"Fundamentally, as per our previous submissions, the two proposals are incompatible on the same piece of land. In such changed circumstances, and in the absence of an alternative solution enabling co-existence, we are mindful that central and local government will need to consider competing priorities in a very different way than was the case when we submitted the Development Consent Order.
"We recognise that there may be other economic opportunities for the Teesworks site which could advance at pace.”
A BP spokesperson said: “Due to material changes in circumstances on the Teesworks site, including a planning application being granted locally for a data centre on the same piece of land, we have taken the decision not to progress the development of H2Teesside and have withdrawn our Development Consent Order application for the project.
“We continue to move forward with other projects on Teesside, including our investments in Net Zero Teesside Power and the Northern Endurance Partnership, and remain an active partner in the region.”