Blackstone lines up data centre at doomed Britishvolt site
A £10bn data centre campus could be built at Northumberland Energy Park, potentially netting £110m for the local authority while signalling the end of battery plant proposals.
With Blackstone now having secured the site in a deal with LPA receivers, Northumberland County Council’s cabinet will next week discuss arrangements that will allow established operator QTS, owned by Blackstone, to advance a new centre at the 235-acre NEP phase three plot at East Sleekburn.
At present, NCC has in place an arrangement with Power by BV Properties, a vehicle associated with electric vehicle battery startup Britishvolt, which collapsed into administration in early 2023.
Attempts to resuscitate the battery plant idea at the 235-acre site with Australian group Recharge have come to nothing.
Should cabinet agree, a deed of release will be advanced, with a new arrangement, with Blackstone, then coming into force for the site, which is the former coal stacking yard of Blyth power station at Cambois – a site bought by the council from RWE in 2021 then sold for £4m with the buyback option, making the council’s say-so an essential factor in any plans.
What is now proposed for the site is described by officers as “a major Hyperscale Cloud and/or AI Data Centre Campus, to be delivered by
QTS, a leading global data centre owner, operator and developer, which is owned by funds advised by affiliates of Blackstone Inc., one of the largest asset management funds in the world”
Along with the £10bn Blackstone investment, there could be a further £5bn to £10bn through tenant investment, the report said.
The Blackstone subsidiary has now entered into a contract with Begbies Traynor, the joint LPA receivers of the property assets of BritishVolt Properties.
Begbies said that the negotiations took 15 months, before being agreed for an undisclosed sum.
The secured lender over the property assets of BritishVolt Properties Ltd was a fund managed by the Katch Investment Group which appointed Begbies Traynor’s Bob Maxwell and Julian Pitts as LPA receivers in November 2022.
Katch Investment Group was advised in the transaction by Gunnercooke, and Clarion Solicitors provided legal advice to the LPA receivers.
Data centres are big business, with the GVA contribution to the UK economy of each centre being an estimated £400m. As officers outline in the report to cabinet:
“The UK is seen as a strong location for datacentres due to the experience and innovation in property and construction, the connectivity and optical fibre infrastructure, data security and privacy regulations, the welcoming investment environment, the cool and temperate climate and importantly the stable and affordable power supply.
“The strengths of the NEP3 site, particularly the scale of the site, it’s location, access to cooling water and strong renewable energy supply is
critical to making NEP3 an attractive site for a large scale inward investment of this nature. The investment value of such operations is significant, with large construction programmes associated with their development, related infrastructure development and community benefit.”
As detailed by Northumberland leader Cllr Glen Sanderson, a disposal would see the local authority receive up to £110m, proceeds it would use to establish a ring-fended investment and endowment fund.
This could potentially be used to explore and advance sites associated with the incoming Northumberland Line, and sites accessible from the Port of Blyth.
The leader said: “Driving growth and jobs is a key priority for this Council. Next week, Cabinet will consider this really unique opportunity for Northumberland which offers a huge boost to the regeneration and renaissance of the local area.
“The project would represent a significant inward investment of up to £10bn, putting our County at the forefront of developments in the digital economy, and delivering over 1,600 direct jobs, including 1,200 long-term construction jobs, and over 2,700 indirect jobs over the course of the development.
“If agreed, the Council would receive up to £110m in exchange for amending the buy-back option on the NEP3 land site, and use the proceeds to establish a fund which will drive investment, including in the economic corridor along our fantastic, new Northumberland Line.
“Through the Council’s investment company, Advance, we have worked tirelessly to make this site such an attractive place for global companies to do business. We look forward to considering this opportunity at Cabinet next week.”
Bob Maxwell of Begbies Traynor said: “From a difficult situation, the future sale will ensure a very bright future for the site. The process of securing a dependable buyer who has a clear, deliverable plan for the long-term use of this strategically important land asset was crucial after the failure of the last business at the site, and was a key factor in gaining the approval of Northumberland County Council who held options on the site.”
“This transaction ensures that a well-funded and respected new owner can bring the enterprise and employment to the site that it deserves, and will be a huge boost for the whole region. Its scale and location make it perfect as the location for a European data hub, and the plans put forward will hopefully kick-start an entire tech industry cluster in the North East from the site.”
