National Grid has agreed to buy land at Dorman Point on the Teesworks estate for a new Teesside substation, a step towards supplying a planned AI data centre next door. Sky News reported on 1 November that the deal was signed last week and covers more than 70 acres; the Guardian puts it at 73 acres. The price has not been disclosed.
National Grid’s own project page says the substation, which it calls Tees Dock, would provide “over 1 gigawatt (GW) of new capacity”. Tees Valley mayor Ben Houchen has gone further, talking of 3.2GW on the site.
What National Grid has said about the land deal
Matt Pearce, National Grid’s head of lands, said in a statement reported by Sky News: “Securing this land agreement is an important step forward in the development of the new substation.” He added that the company was “committed to working closely with our partners to progress the development as quickly as possible”. The Guardian quotes him saying the deal “will support the growth of AI and digital technologies”.
Teesworks, the private-public partnership that owns the land, describes the plant in bigger terms. Its chairman, Chris Musgrave, told Sky News that “making this land available for what is expected to be the UK’s largest substation is an important step”. He said the focus now was “delivering the remediation works and preparing the land for handover”. The site is a former steelworks, and the ground has to be cleaned up before anything is built on it.
What the Teesside substation would do
National Grid’s project page describes a 400 kV substation “within the established industrial Teesworks area on the south bank of the River Tees, east of Middlesbrough”. It says the substation is “contracted to provide over 1 gigawatt of import and export capacity”, and that it would support “a proposed private-wire network serving a new data centre, alongside a proposed battery energy storage system”. A private-wire network carries power straight to a user rather than through the public distribution grid.
More detail is in the company’s needs case summary, filed with the energy regulator Ofgem in October. It says the substation is being built “in response to customer connection requests” and will be connected “by looping in the existing Lackenby–Norton 400kV overhead line”. The main driver is a customer given a Gate 2 Phase 1 slot under the UK’s reformed connection queue. National Grid’s preferred design is an indoor substation using SF6-free gas-insulated switchgear, partly because “the landowner is willing to sell land” for that smaller footprint, avoiding compulsory purchase, which the document estimates would take 12 to 24 months.
Planning status and timeline
National Grid submitted an outline planning application to Redcar and Cleveland Borough Council in September, under reference R/2026/0711/OOM. The council and the energy department have said a full environmental impact assessment is not needed. On the company’s indicative timeline, a public consultation on the detailed design follows in spring 2027, then a further planning application. Land remediation and construction would start from autumn or winter 2027, subject to approvals. National Grid says a £530,000 community fund will be unlocked if consent is granted.
Houchen’s 3.2GW figure
Houchen used his own X account on Sunday morning to post: “Building 3.2GW of power on a single site in Teesside means Britain can now be serious about having its own AI capability, with sensitive data stored safely on British soil.” In a statement to Sky News he said: “Having up to 3.2GW of capacity here means we can finally compete for those projects.”
That figure is Houchen’s. National Grid’s documents say “over 1 gigawatt”, and neither the mayor’s post nor the reports say whether 3.2GW refers to the substation, the data centre or the wider estate.
Sky also reported, citing unnamed sources, that Balfour Beatty was in line to build the substation, with Steel River Power, which Sky says owns and operates the estate’s private electricity network, heavily involved. Sky’s sources also said the neighbouring data centre was likely to be the largest in Europe. The Guardian said both companies had been approached for comment. No data-centre operator has been named.
Why the Teesside substation matters for AI data centres
Power, not land, has become the hard limit on where large data centres can go in Britain. The government acknowledged as much last week in the five tests it set for faster grid connections at strategic sites, and the Guardian reports that a draft national policy statement published last week calls data centres “as fundamental to our economy as the railways and electricity networks”. A plot with a contracted gigawatt-scale connection is what developers are short of.
The scale stands out. When Telehouse paid more than £220m for a London Docklands site, the selling point was 65MVA of power. National Grid’s Teesside commitment is many times that, on a brownfield estate where the landowner is willing to sell and no development consent order is needed, according to the needs case.
Still, a land deal is an early step. National Grid has outline planning pending, a reserved matters application still to come and land remediation that, on its own timeline, does not begin until late 2027. Ofgem has yet to approve the needs case, and the regulator has trimmed National Grid’s spending before, as with the Bramford to Twinstead upgrade. And the gap between “over 1 gigawatt” in National Grid’s documents and Houchen’s 3.2GW matters: investors comparing sites will want the contracted number, not the ambition.
What to watch
Redcar and Cleveland’s decision on the outline application, Ofgem’s ruling on the needs case, and whether a data-centre operator or the contractor is confirmed. National Grid has not yet published the deal on its own news pages.
Sources
- National Grid: Tees Dock Substation project page (read 1 November 2026)
- National Grid Electricity Transmission: Tees Dock Substation Needs Case Summary, October 2026 (PDF)
- Ben Houchen on X, 1 November 2026
- Sky News: National Grid sparks deal to pave way for giant UK data centre, 1 November 2026
- The Guardian: National Grid to site biggest substation on Teesside, near planned AI datacentre, 1 November 2026
Related stories
- UK Sets Five Tests Data Centres Must Pass for Faster Grid Connections
- Telehouse Pays Over £220m for Docklands Site With 65MVA of Power
- Ofgem Approves £642.1m for National Grid’s Bramford to Twinstead Upgrade
Image: Gordon Hatton / Wikimedia Commons, CC BY-SA 2.0, modified by TSN; this image is also CC BY-SA 2.0
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