AI Data Centre wins battle for Teesworks land: How and why?

BP drop plans for enormous Teesside hydrogen project

After a longer-than-expected break, The Teesside Lead returns. Did you miss me? If you did, then sorry. What I thought would be a month of recharging my batteries ended up being two. And now I’m back, just in time for Christmas - which happens to be a very busy time for Teesworks-related stories, as it happens.

To mark this comeback we’re offering a 30% discount on annual subscriptions until the end of 2025. It’s the cheapest way to support The Teesside Lead. An annual subscription will now cost only £34.30 which works out at £2.85 a month.

Thanks to everyone who has already subscribed and supported my work, you will have received an email letting you know that payments have re-started.

I’m easy to get hold of, so let me know if you have any tips or stories. Find me through teesside@thelead.uk or via Bluesky.

Last week I visited Peterlee and made a little video about the Apollo Pavilion. You can see it on Bluesky, Instagram or even Tiktok for the youngsters amongst you.

Until next week,

Leigh

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Teesside in brief

🗳️ Middlesbrough has its first Reform councillor. Joanne Rush was elected to represent Nunthorpe in a by-election this week. The Liberal Democrats were defending the seat after Morgan McClintock’s resignation. The Lib Dems came second, with 550 votes compared to Reform’s 567. Turnout was 35.75%.

🚂 Just over half of trains arriving at Yarm station were on time, according to papers presented to Tees Valley Combined Authority’s transport committee this week. It’s the worst performing station in the region. In January only 58% of trains stopping at the station arrived within three minutes of their scheduled time. For the rest of this year, the percentage of on-time trains was between 61% and 69%.

🏘️ Police say a planning application to convert two flats into a six-bed house could make its residents targets of crimes because of conspiracy theories and misinformation. Developers in Hartlepool are in the process of applying for retrospective planning permission for the change to 27 Tankerville Street. Cleveland Police has objected, saying the area was targeted in last year’s riots as a result of “the spreading of misinformation across shared social media platforms”. They said converting the property to an HMO (house in multiple occupation) would “frustrate” work on rejuvenating the area and “could potentially create further misinformation and make this premises a target and the residents at greater risk of being victims of crime.” A decision is expected later this month.

🏗️ Demolition of the Golden Eagle Hotel in Thornaby has been delayed because vandalism, arson and flooding have caused asbestos to spread on the site. The landmark in the centre of Thornaby had been due to be taken down by Spring 2026, but Stockton Council has said the work will now take more than a year to complete, at a total cost of £2.6m.

Know something we should be featuring? Drop me a line on teesside@thelead.uk

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BP drops Teesside hydrogen plans: How and why?

An artist’s impression of the planned AI data centre at Teesworks (Image: Lichfields).

I’m not sure the decision came as a complete surprise, but the way the story emerged seems to have taken everybody who was watching and waiting flat-footed. This week BP withdrew their application to the government for a Development Consent Order (DCO) for their H2Teesside project.

“Holy shit”, came the response from one journalist I got in touch with.

After Energy Secretary Ed Miliband had twice delayed his decision on the blue hydrogen plant at Teesworks - on the former steelworks site at Redcar - the stakes to approve it became higher and higher. The political wind had changed direction, and momentum for building an AI data centre on the same site seemed to have taken over demand for hydrogen production. Still, when BP confirmed their decision to withdraw - pre-empting a decision from Miliband - it was a total surprise.

BP’s decision to pull out, rather than to allow Miliband to drop the axe on the project, seems to give the secretary of state some political cover. The project was to produce 10% of the country’s hydrogen needs by 2030, an important part of the country’s net zero strategy, Miliband surely had to approve it, but had he lost the argument across the table in the Cabinet?

Earlier this year, Ben Houchen pointed to a letter from the former science and industry secretary Peter Kyle, in which he wrote to the Tees Valley mayor indicating the government’s support for his bid for Teesworks to become an AI Growth Zone. Kyle had already left his post, and it seemed like political posturing to try and force Kyle’s replacement, Liz Kendall, into supporting the bid, too.

Back in 2021, Lord Houchen said: “soon the entire Teesworks site will be home to thousands more jobs and Teesside will lead the UK in net zero manufacturing, energy and innovation”. Now, this week, he’s said an AI data centre will “put our region at the heart of the next industrial revolution in AI and tech.”

Which future industry will Teesside be the location for in another four years’ time?

Perhaps the nail in the coffin for H2Teesside was Sabic’s decision to close their Olefins 6 ethylene cracker at Wilton. They were supposed to be one of the largest local off-takers of hydrogen from H2Teesside. The cancelled domestic hydrogen trial for Redcar would also have relied on hydrogen from H2Teesside. It might be that as well as the political willpower behind the project beginning to wane, the economics of creating blue hydrogen on Teesside stopped adding up.

In their letter withdrawing their application for the hydrogen plant, BP said there had been “significant changes in circumstances” at the Teesworks site.

“The hydrogen demand situation in Teesside has also deteriorated as some major industrial consumers have either scaled back operations or postponed decarbonisation plans, significantly increasing [BP]’s risk in developing the H2 Teesside project,” they added.

The delays to development at the Teesworks site are bad news for more than just the local job market. This week delays at Teesworks are being blamed for financial problems for Redcar & Cleveland Borough Council’s budget for next year.