Ben Houchen development corporation sets up energy distribution company

The company intends to provide high voltage power to Teesworks’ industrial tenants via a private wire network - a privately owned network using locally generated electricity. These networks are seen as an attractive way for companies to be confident they are using low carbon or renewable energy, as well as bringing financial benefits to both energy producers and their consumers.

Excess energy produced for private wire networks can theoretically be sold to the National Grid. However, an energy industry source indicates to The Yorkshire Post that limited capacity on the National Grid remains a stumbling block for private networks hoping to connect to it.

A spokesperson for STDC would not tell The Yorkshire Post how power will be generated for the private network, however a new gas power station being built by BP and Equinor on the former site adjacent to the Redcar steelworks’ blast furnace will not be used.

BP’s new power station, which saw a groundbreaking ceremony a little over a week ago, is the first phase of a project called Net Zero Teesside (NZT). The second phase will see the development of an enormous carbon capture, utilisation and storage (CCUS) facility. If successful, the CCUS project will capture carbon emissions from industrial sources across the Teesworks estate as they are created, before compressing carbon dioxide gas and storing it in an enormous underground reservoir beneath the North Sea.

STDC sent information to the energy industry inviting bids to create its private wire network in July 2020, however the contract remains unfilled. Papers for last month’s STDC board meeting, chaired by Lord Houchen, indicate “work continues to develop the private wire network,” and that “discussions with third parties are ongoing on the joint venture procurement of Teesworks’ power needs.”

The private company Teesworks Ltd was initially a 50-50 split between STDC and private investors including Messrs Musgrave and Corney, however, private partners acquired a 90 per cent stake in November 2021.

Asked what expertise the property developers bring to a company whose nature of business according to Companies House is “distribution of electricity”, a spokesperson for STDC said: “Industry leading, expert private sector partners will be involved as required once we have concluded an agreement.”

When pushed on what sort of agreement was being negotiated, or who the potential expert private sector partners would be, the spokesperson declined to comment on the grounds that “commercial negotiations are ongoing”.

"The aims of SREL are the distribution of electricity across the Teesworks site, and the maximisation and optimisation of the private wire network on the site,” they said.

Update: A previous version of this article said NZT would potentially provide power for the private wire network at Teesworks. A spokesperson for BP said: “Electricity generated by Net Zero Power will be exported directly to the national electricity distribution system”.