New objections to H2Teesside as BP bide their time
Plus: Steel manufacturer on Teesside faces winding-up petition
It’s edition number 64 of The Teesside Lead. Nearly a full year since the (re)launch. Can you believe how much fun we’ve had so far?
This week’s edition delves into the latest document drop around the planned blue hydrogen facility at Teesworks, as well as news on a distressed steel manufacturer on the other side of the river.
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Leigh
Could the tide be turning against BP’s H2Teesside project at Teesworks? The latest load of documents published by the Planning Inspectorate suggest things are not as straightforward as they could be.
The Teesside Lead previously broke the news that Teesworks had made objections to the blue hydrogen plant. The potential landlords are instead lining up the proposed site to house an AI data centre instead.
H2Teesside is currently going through the Development Consent Order process - like getting planning permission, except because it’s a project of national significance it goes to the Secretary of State for approval. As an energy project, the fate of H2Teesside is currently being decided by Ed Miliband.
If H2Teesside is given permission by Miliband, it means BP will be given compulsory purchase powers over the site to secure its future. That’s different to the current business plan at Teesworks, where Teesworks Ltd - which is 90% owned by private partners including Chris Musgrave and Martin Corney - buy the freehold to land and lease it out.
For the land where the SeAH Wind monopile factory sits, Teesworks Ltd owns the 90-acre site but leased it to finance giants Macquarie for 40 years for a cash sum of £93.3m. Macquarie lease it to Tees Valley Combined Authority, who in turn lease it to SeAH.
Teesworks Ltd infamously acquired the land for £100, although a side deal of £15m shows what the supposed market value of a 90-acre plot at Teesworks is. If BP are granted the power to buy the land for H2Teesside, they could buy the freehold to the 100-acre plot on which they’ve planned their hydrogen plant for a similar fee.
It would be naive to not think this is a consideration of Teesworks when they oppose H2Teesside. However, other nearby stakeholders appear to be changing their minds about the project, and BP seem to be trying to run down the clock and waiting for DCO approval from Ed Miliband instead of putting their potential neighbours’ minds to rest.
The latest submission by lawyers for the South Tees Group (STG), which represents Teesworks Ltd as well as the public South Tees Development Corporation (STDC), dated August 1st says that BP “has not taken any steps to advance or intensify negotiations with STG in respect of the Proposed Development.”
STG is claiming the fact BP isn’t trying to purchase the land from them is a sign that they aren’t committed to the project, but why would they enter commercial negotiations before a decision is made on whether they’re granted compulsory purchase powers?
Elsewhere, the National Grid has objected to the project, criticising BP for what it says is “no recent engagement” in relation to addressing issues with H2Teesside which it says may impact its own plans to expand the Saltholme substation on the opposite side of the river.
National Grid was offered a meeting by BP, but a pre-requisite was to enter an NDA first. National Grid refused, saying the terms “were wholly inappropriate in the context of the subject matter of the proposed engagement,” and received no further response from BP since asking them to reconsider.
BP told me they “continue to engage with relevant stakeholders” about their plans.
However, Northumbrian Water are another stakeholder to raise concerns about BP’s conduct during the process. Paperwork they had sent to BP in order to reach an agreement on their plans or H2Teesside late last year was only returned in mid-July.
The amendments put forward by BP “are fundamental and numerous and concern key matters of principle in relation to costs and liability,” according to Northumbrian Water’s lawyers. “The vast majority of the proposed changes by [BP] are not acceptable to [Northumbrian Water],” says the latest submission by the water company’s lawyers. After raising these concerns with BP, Northumbrian’s lawyers say they’ve yet to receive a substantive response.
A spokesperson for Northumbrian Water told me: “Our position on the H2Teesside proposal has not changed — we continue to work with developers of the H2Teesside project to understand how their plans might affect our assets and customers, and to agree the best way to protect them.”
Since their “strategy reset” at the start of the year, in which BP ditched green energy investments in favour of more fossil fuel extraction, the company insists it remains focused on “high-graded projects in hydrogen” and carbon capture.
Its focus in the UK, according to a spokesperson, “is on projects in Teesside - NZT Power, Northern Endurance Partnership (NEP) and H2Teesside.”
NZT Power is a gas-fired power station at Teesworks, and NEP is the carbon capture project which hopes to capture its emissions. Both have been approved.
Ed Miliband has until 28 August to approve H2Teesside.
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