National Grid to develop huge substation in Teesside
Teesworks has sold more than 70 acres at Dorman Point to National Grid Electricity Transmission for an undisclosed price.
The purchase of 73.3 acres was agreed last week between National Grid and Teesworks, a public-private partnership between local developers Chris Musgrave of JC Musgrave and Martin Corney of Northern Land Management, together with a 90% stake, and 10% publicly owned by the South Tees Development Corporation.
Agents estimate the local industrial land value of up to £300,000 an acre would produce a price of around £20m for the site.
Chris Musgrave, chairman of Teesworks, said: “Agreeing this deal with National Grid is a significant milestone for Teesworks and reflects the scale of the opportunity here at the Teesworks site. Making this land available for what is expected to be the UK’s largest substation is an important step in putting the infrastructure in place to support the next phase of industrial development across the site.
“Our focus now is on delivering the remediation works and preparing the land for handover, helping to ensure Teesworks is ready to support the energy needs of major businesses and industries for years to come.”
Tees Valley Mayor Ben Houchen added: “Everyone who’s tried to build a data centre or large-scale advanced manufacturing, technological or energy-intensive industrial developments in this country knows the biggest problem is getting enough power to the site quickly.
“Having a contracted 1.44GW capacity, with further expansion up to 3.2GW in the near future, means we can finally compete for those projects.
“If Britain is serious about having its own AI capability and other advanced manufacturing technologies, with sensitive data stored safely on British soil, it needs somewhere to physically put it, and I’d much rather that was Teesside than Texas or Abu Dhabi.
“Full credit to Steel River Power, Iberdrola, Teesworks and National Grid for getting it over the line, and I’ve no doubt it’ll mean thousands of good jobs for local people over the next few years.”
Teesworks will progress with remediation works across the site during the next six months, preparing the land for National Grid Electricity Transmission ahead of the next stage of development.
Matt Pearce, National Grid head of land, said “Securing this land agreement is an important step forward in the development of the new substation.
“It reflects the constructive work between all those involved to enable this vital infrastructure which is part of the Great Grid Upgrade, the largest upgrade of the electricity grid in generations, and will support the growth of AI and digital technologies and enable the region’s next phase of industrial and economic development.
“We are committed to working closely with our partners to progress the development as quickly as possible.”
The site will accommodate Teesside Node A, the major new substation that will be delivered by National Grid’s contractor, Balfour Beatty and from which National Grid will provide Steel River Power an additional 1.44GW, equivalent to the same amount of power as Greater Manchester and Glasgow combined. The land sits directly beneath both 275kV and 400kV overhead electricity transmission lines, providing a strategically positioned location for the new infrastructure.
The substation’s initial 1,440 MVA capacity is scheduled to come online by the end of 2029, providing a major boost to electricity infrastructure at Teesworks. The capacity is contracted to Steel River Power, which owns and operates the private electricity network across the estate.
SRP’s existing network has a capacity of 360 MVA, with 200 MVA currently available to support businesses and projects at Teesworks. The company has been contracted with National Grid since 2024 for an additional 1,440 MVA to meet the estate’s known future energy demand requirements as industrial development continues.
SRP is a joint venture between Steel River Energy Limited and North West Electricity Networks, part of the ScottishPower-Iberdrola group.
David Smith, chair of the South Tees Development Corporation, said: “This agreement is an important step forward for the site. 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.
“This agreement is a real boost to our ability to attract future investment and move towards the development corporation’s long-term aims: bringing land back into productive use, creating opportunities for local people and ensuring the whole area benefits from regeneration for decades to come.”
Last month, the government appointed inspector Laura Shoaf to carry out a review of the way Tees Valley Combined Authority is operating. The minister’s list of concerns covers capital risk, debt levels, interest rates, decision-making, officer churn, on-lending (borrowing to lend) and more. The combined authority welcomed the inspector’s appointment and said it would co-operate fully.
Among the deals that have come under close public scrutiny in recent years have been land sales at Teesside Freeport, in which Teesworks land sits. Developers behind Teesworks were able to purchase remediated land from the public sector for as little as £1/acre and benefit from 90% of the uplift when sold to end users. No wrongdoing has been found.
