National Grid to construct the UK’s largest electricity substation at Teesworks to power massive data center and battery storage expansion

The National Grid has finalized a land acquisition deal to construct the United Kingdom’s largest electricity substation, a critical infrastructure project located at the Dorman Point site in Teesside. Spanning 73.3 acres, the facility is designed to act as the primary power gateway for a massive upcoming data center and large-scale battery energy storage system (BESS). By positioning the substation directly beneath existing 275kV and 400kV overhead transmission lines, the project aims to bypass the grid congestion issues that have historically stifled the development of energy-intensive industrial projects in the UK.

The facility, which secured planning permission last summer, is slated to become operational by the end of 2029 with an initial capacity of 1,440 MVA. Beyond its immediate utility, the site’s infrastructure is designed for significant scalability, with long-term plans to expand capacity to 3.2 GW. This development marks a pivotal shift for the Teesworks estate, the largest brownfield site in Europe, transforming it into a cornerstone of Britain’s future digital and industrial landscape.

A Strategic Response to Britain’s Power Deficit

The primary challenge facing the UK’s technological sector over the last decade has been a "power bottleneck." As the demand for artificial intelligence (AI), high-performance computing, and cloud infrastructure surges, developers have frequently cited the inability to secure grid connections as the primary barrier to project completion.

Tees Valley Mayor Ben Houchen has been a vocal proponent of the site’s potential, noting that the ability to offer a contracted 1.44 GW capacity—with a clear roadmap to 3.2 GW—positions Teesside as a premier destination for global tech giants. "Everyone who has tried to build a data center or large-scale advanced manufacturing, technological, or energy-intensive industrial development in this country knows the biggest problem is getting enough power to the site quickly," Houchen stated. "Having a contracted 1.44 GW capacity means we can finally compete for those projects against hubs in Texas or Abu Dhabi."

The shift toward Teesside is also a matter of national sovereignty. Policymakers have increasingly argued that if the UK intends to develop independent AI capabilities, it must host the physical infrastructure—the server farms and cooling systems—domestically rather than relying on international jurisdictions.

Project Chronology and Evolution

The development of the Dorman Point substation is the culmination of years of site preparation and shifting industrial strategy.

• 2023-2024: The Teesworks site, spanning 2,500 acres, undergoes massive remediation to prepare for large-scale industrial tenants.
• Summer 2025: Planning permission is formally granted for the substation, despite the withdrawal of BP from a previously proposed hydrogen power station project on the same grounds.
• Late 2025: The site is officially earmarked as a potential hub for a major AI data center.
• Q4 2026: The National Grid finalizes the acquisition of 73.3 acres of land from the Teesworks private-public partnership.
• 2029 (Target): The substation is scheduled to come online, with an initial 1,440 MVA capacity managed by Steel River Power (SRP).

The decision to pivot toward data center infrastructure reflects the changing economic reality of the region. Where the site was once a hub for heavy steel production, the new focus is on the "new economy"—data, AI, and battery storage.

The Role of Steel River Power

The operation of the local network will be managed by Steel River Power (SRP), which already maintains a private electricity network across the estate. Currently, SRP operates with a capacity of 360 MVA, of which 200 MVA is available for immediate industrial use. The transition to the new substation will represent a nearly five-fold increase in the estate’s total capacity, effectively removing the "power ceiling" that previously limited the size of tenants the site could attract.

For developers, the certainty of energy delivery is as important as the cost of the land itself. By pre-securing this infrastructure, the Teesworks partnership is effectively "de-risking" the site for potential hyperscalers—large corporations like Microsoft, Google, or Amazon—that require stable, high-voltage power to run server cooling systems and high-density computing clusters.

Economic and Regulatory Implications

The UK government has taken an active interest in the project, particularly through the introduction of the Data Centre Covenant in the 2026 Autumn Budget. This policy framework provides a quid-pro-quo arrangement: developers who commit to high levels of local investment, water efficiency, and renewable energy integration receive expedited grid connection approvals.

The Dorman Point substation aligns perfectly with these government mandates. By consolidating power infrastructure in a single, well-serviced location, the project minimizes the need for fragmented, inefficient grid upgrades across the region. Furthermore, the construction of the data center itself is expected to create thousands of local jobs, moving beyond the temporary nature of construction work into long-term facility management, cybersecurity, and maintenance roles.

David Smith, chair of the South Tees Development Corporation (STDC), emphasized the long-term vision of the project. "Having spent almost two decades working in the sector, I know how important access to power is in turning development ambitions into reality. For potential investors, having confidence that the energy infrastructure will be there to support their plans is crucial," Smith remarked. He noted that the project is a vital step in "bringing land back into productive use" and ensuring the economic benefits of regeneration are felt across the region for decades.

Broader Impact: The Data Center Arms Race

The global race to build AI infrastructure has put unprecedented pressure on national energy grids. Unlike traditional office-based data centers, AI-focused facilities require significantly higher power densities to support GPU-intensive workloads.

The Teesworks development serves as a model for "energy-first" industrial planning. By co-locating the substation with the land, the project avoids the lengthy "connection queues" that characterize much of the UK’s aging electrical infrastructure. Analysis suggests that this model could be replicated in other industrial heartlands, provided that local authorities can secure the necessary land-use agreements and private-public funding models.

However, the project is not without its challenges. The scale of the data center—covering more than 462,000 square meters—requires careful consideration of environmental impacts, particularly concerning water usage for cooling and the integration of renewable energy sources to power the facility. The government’s emphasis on "minimizing water and power use" in the new Covenant suggests that future tenants will be under significant scrutiny to prove the sustainability of their operations.

Conclusion

The National Grid’s investment in Teesside is more than a utility upgrade; it is a fundamental shift in the UK’s industrial strategy. By betting on the data-driven future of the economy, the project aims to secure the UK’s position in the global AI hierarchy. As the 2029 deadline approaches, the successful deployment of the 1,440 MVA capacity will be closely watched by investors, policymakers, and industry leaders as a litmus test for whether the UK can successfully balance its climate goals with the voracious energy demands of the next technological revolution.

With the land acquisition complete and the legal frameworks established, the focus now shifts to the engineering and construction phases. If the project meets its milestones, the Teesworks site will transition from a legacy industrial zone to a critical node in Europe’s digital infrastructure, proving that even the most post-industrial landscapes can be revitalized through strategic, power-intensive investment.