National Grid Agrees to Buy 73 Acres on Teesside for Substation Beside Planned AI Datacentre

National Grid has agreed to buy 29.5 hectares (73 acres) at Dorman Point on Teesside. It wants to build what could become Britain's biggest electricity substation there.

The land deal was reached in late October. Sky News first reported it. The seller is Teesworks, the local private-public partnership that controls the wider former steelworks estate, according to the Guardian and Sky's account. The purchase price has not been disclosed.

What National Grid is building

The substation falls under National Grid's Great Grid Upgrade, its program to expand the transmission network. It is designed to feed a private-wire network serving a planned AI datacentre and a battery energy storage system.

The project is expected to add more than 1 gigawatt of capacity. Houchen, the Tees Valley mayor, uses a bigger number. He told Sky News that having "up to 3.2GW of capacity here means we can finally compete for those projects." That is his figure for what the site could ultimately hold, not power from a finished substation.

An outline planning application went to the local authority in September 2026. The planning authority has not yet responded. Community consultation is due to close November 11.

Matt Pearce, National Grid's head of land, said the deal "reflects the constructive work between all those involved to enable this vital infrastructure." He said the company is "committed to working closely with our partners to progress the development as quickly as possible."

The datacentre it would serve

The UK government identified Teesworks in 2025 as a prime candidate for a large AI datacentre. Planning applications describe a campus of nearly 500,000 square metres, roughly 5.5 million square feet.

Houchen's pitch is about speed. "Everyone who has tried to build a datacentre in this country knows the biggest problem is getting enough power to the site quickly," he said. "While we've been stuck in the queue, the US, the Gulf and parts of Europe have been getting on with it and hoovering up the investment."

He also made a sovereignty argument. "If Britain is serious about having its own AI capability, 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."

Last week the government published a draft national policy statement on datacentres. It calls them "as fundamental to our economy as the railways and electricity networks on which we have long depended." It also says: "We must take control over the development of datacentres in this country and ensure that the country and host communities benefit from them."

Who builds it

Balfour Beatty, the London-listed infrastructure group, is reported to be in line to deliver the substation. Steel River Power, which owns and operates the private electricity network across the Teesworks estate, is also heavily involved. Balfour Beatty and Steel River Power were approached for comment. A construction award has not been confirmed.

North East Bylines, a local outlet, says Steel River Power is a joint venture between Steel River Energy Limited and North West Electricity Networks, part of Iberdrola. It says Chris Musgrave and Martin Corney each hold 45% of Steel River Energy, with the publicly owned South Tees Development Corporation holding the remaining 10%. The same outlet says Balfour Beatty's contract would also cover a high-voltage link to the datacentre site, about three miles away.

Open questions

North East Bylines challenges two parts of the story. It says the South Tees Development Corporation, not Teesworks, owns most of the land at Dorman Point. On that account, Teesworks may have bought the acreage from the public body before selling it to National Grid. That differs from the Teesworks-owned description given elsewhere, and neither Teesworks nor the development corporation has been quoted on it.

The outlet also argues that a substation does not solve the supply problem. Datacentres run around the clock and need dispatchable power. With no coal left on the UK grid, North East Bylines says, that power has to come from nuclear or gas. Wind and solar are intermittent. Battery storage, which can absorb power when it is cheap or plentiful and release it at peak demand, is part of the plan. No source describes a generation supply for the site beyond the grid connection.

No datacentre operator has publicly committed to the Teesworks campus. A grid connection is only one input. Projects also need permits, transformers and finished buildings.

There is also public resistance elsewhere in the country. Campaign groups are protesting against planned datacentres from Auchtertool, north of Edinburgh, to Brick Lane in east London. In October, the Guardian reported that AI companies told ministers they had 12 months to head off public opposition or risk US-style protests that could threaten construction.

The next checkpoints are the November 11 close of consultation and the planning authority's response to the outline application. After that comes the question of whether a datacentre operator signs on.