Tees Valley Mayor Ben Houchen has stated that the decision by BP to withdraw plans for a hydrogen plant will help position the area “at the heart” of the UK’s technology sector. The energy firm retracted its proposal for the plant at Teesworks in Redcar after a dispute arose over whether the land would be better used for an artificial intelligence (AI) data centre.

BP cited a “material change in circumstances” regarding the specific plot of land designated for the facility as part of its reason for pulling out. Mayor Houchen claimed that the decision paves the way for the construction of an AI data centre, which he believes would “create more long-term jobs, attract more investment and deliver greater future-proof growth”.

BP’s project, H2Teesside, was originally promoted as a key component of ambitions for Teesside to become a hub for green energy, until the landowners, South Tees Group (STG), sought permission to develop a data centre there instead.

Mayor Houchen confirmed he would continue collaborating with BP on the Net Zero Teesside (NZT) project, which involves a proposed gas-fired power station equipped with carbon capture and storage technology. The Mayor maintained that the authority has a duty to ensure the Teesworks site is being used to “deliver the biggest possible benefit for local people”.

He commented: “BP’s hydrogen project faced a number of challenges, and while I know this won’t have been an easy decision, I welcome their pragmatism. This is absolutely the right move for Teesside.”

Teesworks is managed as a joint venture between the publicly funded South Tees Development Corporation, which is led by the Tees Valley Combined Authority (TVCA), and Teesside businessmen Martin Corney and Chris Musgrave. The businessmen initially held 50 per cent of the shares in Teesworks, but this increased to 90 per cent in 2021, with the remaining 10 per cent held by the public body.

Image source: Teesworks