Massive Electrical
Substation to
SupplyTeesworks
Data Centre
Photo by Winston Chen on Unsplash
Scott Hunter
2 November 2026
Sky News reported yesterday (here) that a deal has been struck to build a massive electrical substation to power the data centre under construction on the Teesworks site. The deal involves the company that owns the site wire network – Steel River Power – and the National Grid Electricity Transmission. The substation, once built will be the largest in the UK.
The Sky report goes on to explain that one of the issues identified in last week’s budget is the urgent need to secure AI sovereignty, i.e. to ensure that the UK has sufficient infrastructure to maintain AI sovereignty, which, at present it risks losing to competitors, especially those in the US and China. This, the government asserts, is now as significant to the economy and electricity rail infrastructure. The data centre under construction at Teesworks will be the largest in Europe, the report states, and will thus provide the AI security the country needs.
But data centres are notoriously power hungry and need to be sited where there is adequate power supply. Hence the importance of the national grid substation, which is to be sited a Dorman Point, near Grangetown.
Who will benefit?
The country.
The data centre and substation will ensure that the UK has sufficient infrastructure that it will not rely on foreign powers for data centre capacity.
The government.
It has got its dominoes in order and the project will get started before large scale opposition to data centres gets underway. It may even have set things up carefully that the problem of data centres affecting the local electricity supply of other users will be overcome.
Those with a 90% shareholding in Teesworks Ltd.
Land at Dorman Point has been remediated at public expense by the South Tees Development Corporation. The normal arrangement is for the freehold on this land, once remediated, to be sold for a pittance to Teesworks Ltd, 90% of whose shares are held by property developers, Martin Corney and Chris Musgrave.
At the site of the SeAH factory, for example, the freehold was sold to Teesworks Ltd for £96.79. (although it is not certain that they have settled their bill yet). The land at Dorman Point will now be purchased (we expect, as leasehold) by National Grid Electricity Transmission for an unspecified sum, presumably somewhat in excess of £96.79. The shares in Teesworks were a gift to the developers from Tees Valley mayor, Ben Houchen. The Dorman Point deal involves the transfer of 70 acres.
Steel River Power Ltd
Steel River Power Ltd owns the private wire network that currently serves the Teesworks site. That includes supply lines and substations. The wire network was bought by Teesworks Ltd from the South Tees Development in October 2024 for £10.91. (We challenged the mayor during a mayor’s Question Time event at the time, to justify the bargain price. He stated that it was appropriate as the network of substations was very old, so it amounted to Teesworks Ltd being handed a liability rather than acquiring an asset).
A joint venture was then set up to modernize the network. This was between North West Electricity Networks UK and a company called Steel River Energy Ltd. Steel River Energy, like Teesworks Limited, is 90% owned by Corney and Musgrave and 10% by the South Tees Development Corporation. Its statement of accounts for 2025 shows it £1.8 mn in debt. That, presumably, is about to change.
Those who will not benefit
The people of Teesside. The largest data centre in Europe will occupy 222 acres on the Teesworks site but is likely to employ fewer than 100 people. 50 is probably more likely. As for the substation at Dorman Point, it will have no employees.
Who will lose out?
The people of Teesside. The siting of the largest electrical substation in the UK on Teesside will not be bringing any of the 20,000 jobs promised as the Teesworks site was being remediated. The economic regeneration of this region does not figure in the plans. If anything, they fly in the face of it.
The Tees Valley Review, published in January 2024 investigated the award of contracts to Corney and Musgrave and recommended that those contracts be renegotiated as the public interest appeared to have been subordinate to the pecuniary interests of the developers. The then CEO of South Tees Development Corporation, Julie Gilhespie, wrote to the developers to ask them to renegotiate. They refused, and that was the end of it.
In this latest deal, the interests of the developers will again be well served. Yet the government, aware that there were serious problems at the Tees Valley Authority and the Development Corporation, issued it a Best Value Notice in the spring of 2025, and has recently announced that an inspection team is to go in to investigate further, as the suspicion of financial impropriety lingers. Now, the substation deal has been arranged by a subsidiary of National Grid plc, which is not publicly owned. But the National Energy Systems Operator (NESO) that oversees it, is a public body. So, at some level, this deal has been officially sanctioned.
Net Zero Teesside
Middlesbrough has recently been singled out as the worst place in the UK for children to grow up. The tragic road collision on the A66 in August laid bare the problems faced by Cleveland Police in maintaining law and order in a region plagued by high levels of crime. Cleveland Fire Brigade has now launched a campaign arguing that it suffers similar levels of underfunding. While certain neighbourhoods in the region suffer from high welfare dependency, high unemployment, and significant health inequality.
And speaking of health inequality, while the severity of the health risks associated with electro-magnetic fields are disputed, it is the case that the largest electrical substations, i.e. national grid substations like this one, are typically situated at a distance from population centres. Yet the location of the proposed substation is at the part of the Teesworks site that is closest to a population centre.
The reason for this, we might conjecture, is that large parts of the Teesworks site are actually not being remediated. The project is developer led, and the developers are interested only in the easy bits, as that is the quickest way for them to turn a profit.
All of which results in a declining confidence that the inspection that has been announced is as robust as it at first appeared. Is it, in fact, purely cosmetic? The Tees Valley Review was as thorough as its remit would allow and did not hold back on criticism of the Authority and its senior officers. Yet little has come of it.
When thousands of crustaceans washed up on the beaches around Tees Bay, the government response was to shut down investigation as quickly as possible and to propagate a spurious explanation of the events. The powers that be at Defra tried to sweep that catastrophe under the carpet so as not to impede the development of Teesside Freeport. Are we seeing the same thing again, where mismanagement at the TVCA can be overlooked when it suits interests beyond this region? It’s starting to look that way.