Teesworks tensions reflected in Westminster

Plus: Houchen's rants at public meeting

This week has been a big week in Teesside politics, as a strategic shift at Teesworks has pit two government departments against each other.

It also seems to be a turning point for the region’s future industrial fate.

This is edition number 62 of The Teesside Lead.

This week’s main story has been covered by multiple outlets this week, but was first seen in The Teesside Lead two weeks ago. If you want to support this work, it’s free to subscribe. Paid subs get a bit more for only £4.99 a month, or £49 a year.

Thanks for reading, and thanks to all who get in touch with story tips. Discretion assured, as always! Get in touch at teesside@thelead.uk or via Bluesky.

Enjoy your week,

Leigh

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At the Teesworks site entrance (Image: Leigh Jones).

For people who follow politics in the Tees Valley, there was one huge story this week - that of Teesworks and South Tees Development Corporation (STDC) objecting to BP’s H2Teesside blue hydrogen project.

Both the FT and Teesside Live reported on the story this week. It’s one that is familiar to paid subs of The Teesside Lead, since it’s something I’ve covered here for the last two weeks.

Teesworks is likely to be given the status of an AI Growth Zone by the government. In February the Government asked for applications from local authorities and businesses to become AI Growth Zones - special areas where infrastructure to support the development of AI would be backed by government funding.

BP’s H2Teesside project will turn natural gas into hydrogen gas to be used in industry. The plan is for the plant to produce 20% of the UK’s hydrogen by 2030. As a nationally significant infrastructure project, H2Teesside is currently going through the process of gaining a Development Consent Order. DCO’s are granted by the secretary of state, in this case Ed Miliband, avoiding local planning processes.

Ed Miliband is currently deciding whether or not to approve H2Teesside, and has until 28 August to do so.

As part of the process, Teesworks Ltd and STDC have entered joint objections to H2Teesside - a project which was welcomed by mayor Ben Houchen in 2021. When the project was announced he said the region was “set to play its part in the clean energy revolution and the innovative sectors of the future in the way to Net Zero.”

Now it looks as if Teesworks doesn’t want to play its part in the “energy revolution”, and is instead throwing all of its eggs into the data centre basket.

A planning application for a huge 124-acre data centre was submitted to Redcar and Cleveland Borough Council (RCBC) last month, and its footprint overlaps that of H2Teesside.

This conflict between projects in Teesside is reflected in Westminster, where two government departments are in direct conflict with each other, and refuse to talk about it.

Both the Department for Science, Innovation and Technology (DSIT) and Ed Miliband’s Department for Energy Security and Net Zero (DESNZ) gave me the swiftest “no comments” in history this week when I asked what was happening. Both gave me their refusal to speak in less than 10 minutes each.

The private partners who own 90% of Teesworks Ltd, Chris Musgrave and Martin Corney, look set to gain massively from this change of strategy from green energy to data centres.

Based on what we know from land deals for SeAH Wind and Net Zero Teesside, the going rate for land at Teesworks is around £45,000 per-acre per-year.

But the US property company Cushman & Wakefield say the price per-acre for data centres in America in 2024 was equivalent to £180,000 a year.

Not only do they stand to massively gain from the change of use of land they have the right to buy for £1 an acre, but also from selling electricity to the power-hungry data centres.

In their objections to the DCO, lawyers for Teesworks Ltd and STDC said the site was ideally placed to support data centres because it “is on the only site in the UK with the power connections available now to host an AI Growth Zone at scale.”

When I asked representatives of Teesworks Ltd how the private wire network, which provides power to tenants at the site would be powered, they said they were “unable to comment on this.”

Development of that network is being undertaken by Steel River Power Ltd, who were another party represented by the same lawyer’s letter in the objections to the DCO.

Chris Musgrave and Martin Corney own 45% of Steel River Power, STDC own 5% and the remaining 50% is owned by North West Electricity Networks (UK).

It now looks as if ownership of that network has passed into Teesworks Ltd’s hands. Private Eye reported this week that Land Registry documents show the 20 substations which form the network were sold by the public sector for £10.91 in October last year. That’s around the same time North West Electricity Networks (UK) were announced as partners in the venture.

At his first public question time event this week, Ben Houchen said the idea they were sold for £10 was “nonsense”.

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Ben Houchen goes on wild rant at public scrutiny meeting

This week saw Ben Houchen hold his first in-person question time event in Yarm on Wednesday night.

Afterwards, the mayor said: “It was great to answer questions in my hometown and I’m glad more people got the chance to grill me in the flesh,” but if you were there I’m not sure you’d be left the impression that he did actually think it was “great”.

In fact, he deployed a tactic he’s used for years, which is to not correct an interlocutor when he thinks they’re wrong (which would help increase understanding), but to answer a different question entirely.