National Grid to Build UK's Biggest Substation on Teesside for AI 2026

National Grid has moved closer to constructing Britain's biggest electricity substation on Teesside, a project that could supply power to a vast neighbouring AI datacentre as the UK races to expand its artificial intelligence infrastructure. The company agreed last week to purchase 29.5 hectares (73 acres) of land at Dorman Point on a site owned by Teesworks, a local private-public partnership.

The deal, first reported by Sky News, follows reports last year that the UK government had selected Teesworks as the site for a new AI datacentre. Planning applications have already been submitted for a project spanning nearly 500,000 square metres.

Matt Pearce, head of land at National Grid, said the deal "reflects the constructive work between all those involved to enable this vital infrastructure … and will support the growth of AI and digital technologies, and enable the region's next phase of industrial and economic development." He added that the company is "committed to working closely with our partners to progress the development as quickly as possible."

Why the Teesside Substation Matters for AI Datacentres

Ben Houchen, mayor of the Tees Valley combined authority, told Sky News: "Everyone who has tried to build a datacentre in this country knows the biggest problem is getting enough power to the site quickly." His comment underscores a critical bottleneck: AI datacentres are energy-intensive, and the UK's grid connection queue often delays projects by years.

Houchen warned that while the UK has been "stuck in the queue, the US, the Gulf and parts of Europe have been getting on with it and hoovering up the investment." The Teesside project aims to change that by co-locating a massive power facility with the datacentre, potentially accelerating deployment.

What the Land Deal Involves

The 29.5-hectare purchase at Dorman Point is a key step toward building the substation. National Grid's agreement with Teesworks, a partnership between the public and private sectors, secures the land needed for the infrastructure.

The planned datacentre itself would be enormous—nearly 500,000 square metres—making it one of the largest in Europe. Such scale requires robust power infrastructure, which the new substation is designed to provide.

Key Takeaways from the Teesside Project

• National Grid has agreed to buy 29.5 hectares at Dorman Point, Teesside, for Britain's biggest substation.
• The substation could power a planned AI datacentre spanning nearly 500,000 square metres.
• The UK government picked Teesworks as the datacentre site last year; planning applications are already in.
• Grid connection delays are a major hurdle for UK datacentre projects, and this co-location aims to overcome them.
• Local leaders say the project will boost the region's industrial and economic development.

How the Teesside Site Compares

This comparison highlights the scale of the Teesside ambition. By integrating a massive substation with the datacentre, the project could avoid the delays that plague other UK sites.

Who Is Affected and What to Watch Next

Local residents and businesses in Teesside will see significant construction activity and potential economic benefits. The project promises jobs and investment but also raises questions about land use and environmental impact.

For the UK's AI industry, the Teesside substation is a test case: if successful, it could serve as a model for future datacentre developments. The government's push to expand AI infrastructure depends on solving the power problem, and this project is a major step.

What to watch: planning approvals, construction timelines, and whether National Grid can deliver the substation quickly enough to meet the datacentre's needs. The outcome will signal whether the UK can compete in the global AI race.

As the UK accelerates its AI ambitions, the Teesside project is one to follow. For a deeper look at how such developments affect local communities, see our coverage of the AI datacentre UK: living near planned sites.

Similar debates are unfolding elsewhere. In Australia, a mega datacentre planned for outer Melbourne raises community concerns about infrastructure and environment. Residents there are asking the same questions about power and land use.

For a resident-focused perspective, our article on the mega datacentre planned for outer Melbourne: what residents need offers practical insights. These global examples show that the tension between AI growth and local impact is not unique to the UK. The background to this story is set out in Queensland Datacentre: Anthropic's $31bn AI Project in Dalby. A related thread runs through UK Datacentre Water Crisis Threatens AI Growth Plans.

Meanwhile, the business world is watching. The alleged Iranian spies planned violence against UK journalists story reminds us that geopolitical risks can intersect with technology infrastructure. As datacentres become critical assets, security concerns may grow. Earlier coverage in Melbourne AI Datacentre Power Pole Height Sparks Backlash shows how the argument developed. A closer look at the same subject appears in Business: latest articles.