Energy giant bp has told The Northern Echo it still sees a way forward for its huge H2Teesside hydrogen plant – after part of the site it needed to grow into was instead earmarked for a vast data centre.

A proposed large scale data centre which has prompted a dispute between Teesworks and bp has been granted planning permission.

A letter sent to Redcar and Cleveland Council at the end of last month revealed an objection to the data centre since it was claimed it would be incompatible with BP’s H2 Teesside hydrogen project.

But the reserved matters application for the data centre, being brought forward by Teesworks Limited with apparent interest from would-be operators, was granted permission by the local planning authority less than a week later.

A bp spokesperson told us: “H2Teesside has been classed a nationally significant infrastructure project and could be an important part of the UK’s low carbon hydrogen production plans and help support the economic development of Teesside.  

 

“The Development Consent Order (DCO) process for the H2Teesside project is well advanced and in light of a planning application being approved, which overlaps substantially with the proposed hydrogen production facility, we will now take the time to consider this decision in line with our proposals.

 

“H2Teesside has for some time been seeking to find a position of co-existence with South Tees Group in respect of both parties’ aspirations for Teesworks and it remains willing to continue those discussions on proposals that would enable both developments to co-exist.” 

That could involve a challenge to the planning decision, or even a bid to compulsory purchase the land bp needs.

Teesworks Limited and the South Tees Development Corporation in the form of the ‘South Tees Group’ have themselves objected to the potential granting of a development consent order by the secretary of state for H2 Teesside, which would pave the way for land on The Foundry site at Teesworks to be compulsorily purchased.

The two parties involved claim land within the limits of the order would directly clash with land earmarked for the data centre, while a proposed ‘inner zone’ for hazardous installations which would be required for the blue hydrogen production facility would lead to incompatible planning restrictions meaning the data centre could not progress.

Tees Valley Mayor Ben Houchen has previously welcomed BP bosses to Teesworks – the former steelworks site near Redcar which has been reclaimed for new industry – in a bid to secure new investment and in 2021 said its plans were “marking us out as the go-to place for innovation in the hydrogen sector, while creating good-quality, well-paid jobs in the cleaner, safer and healthier industries of the future”.

But Lichfields, Teesworks’ planning consultancy, recently suggested in its representation over the development consent order there was “increasing uncertainty in the applicant’s [BP] commitment to and funding for the proposed development [H2 Teesside]”, suggesting it may not go ahead.

In pivoting away from the project, Teesworks instead wants to become one of the Government’s Artificial Intelligence growth zones, which could attract major private investment in data centres and help power the growth of AI.

Both sides have declared the overlapping projects to be of critical national importance, leading to an impasse which may only be resolved by the determination of the development consent order, which, with powers of compulsory purchase, would prevent the data centre being built on what is the site of the now demolished Redcar Sinter Plant.

In the letter to the council, DWD, another planning consultancy representing BP, said: “H2 Teesside could deliver very substantial public benefits of national significance, including a significant contribution to achieving legally binding ‘net zero’ targets. 

 

“A data centre would not deliver comparable levels of public benefit.”

It also claimed supporting information necessary for the data centre reserved matters application was incomplete and missing key environmental information/assessments.

The letter said the local planning authority should wait on the outcome of the development consent order, while describing both projects as “physically incompatible”, but if it determined the application prior it should be refused.

It said H2 Teesside was at an advanced stage in the planning process and could produce more than 10 per cent of the Government’s hydrogen production target by 2030.

Even if the data centre application was amended so as to avoid physical overlap with the hydrogen scheme, what remained would likely be within a Health and Safety Executive inner zone consultation area, hindering H2 Teesside from obtaining hazardous substance consent required.

The letter also suggested the data centre development, which would extend up over 462,419 square metres, was “speculative” and the timing and nature of the reserved matters application was to “bolster STG’s objection to H2 Teesside”.

In its conclusion, it added: “H2 Teesside would like to note that it has for some time been seeking to find a position of co-existence with STG in respect of both parties’ aspirations for Teesworks and it remains willing to continue those discussions with STG in respect of proposals that would enable both parties’ developments to come forward. 

 

“Whilst the reserved matters application is not such a proposal, as set out in this letter, H2 Teesside remains open to working with STG to find one that is.”

A planning officer’s report regarding the data centre application said the proposed development complied with national and local planning policy.

It said information requested by Natural England  to support the application in order to determine the impacts of the development on designated sites would be provided through the discharge of planning conditions accompanying any approval.

It was also pointed out that the reserved matters application was pursuant to outline permission granted in March 2022 for B2 B8 and E use class development, within which the data centre would sit as B8 development.

The report said: “The reserved matters application is considered to be in accordance with the outline approval and the established parameters set out within the outline application.”

 

It added: “Technical matters relating to drainage, contamination/nuisance, highways and ecology have been considered by the relevant statutory consultees, none of which have raised any objection to the proposed development. 

 

“There are a number of conditions relating to these technical matters that will be required to be discharged and complied with.”

Meanwhile, in its response to the BP objection, Lichfields said discussions were taking place with potential end users of the data centre along with “advanced legal negotiations” over the delivery of the scheme.

Its letter sent to the local planning authority said: “The H2 Teesside project does not yet benefit from a development consent order, nor does it have compulsory acquisition powers in place. 

 

“Accordingly it holds no statutory weight capable of displacing a valid reserved matters application submitted pursuant to a lawful outline planning permission. 

 

“Until such powers are granted and exercised, Teesworks retains the rights to bring forward its approved scheme. 

 

“The interrelationship between our client’s data centre submission and the H2 Teesside scheme is a matter for the Secretary of State to properly consider through the determination of the development consent order.”

It said there was “no legitimate planning reason” why the council should withhold a decision on the data centre application.

Lichfield’s letter said: “It is clear that the reserved matters application is fully compliant with an extant outline planning permission and as such it must be determined based on current policy and law. 

 

“This determination does not need to be held in abeyance pending the decision of the development consent order. 

 

“This is an entirely separate process which is in no way prejudiced by the determination of the reserved matters application for the data centre.

 

“The reserved matters submission was not submitted speculatively, but rather reflects ongoing discussions with an end operator. 

 

“The submission of information to discharge the prior to commencement conditions will ensure that a full assessment of all environmental issues is adequately addressed once the end user’s requirements are fully known.”

A decision from the Secretary of State on the development consent order was expected by August 28, although given considerations it could well be delayed with the Department for Energy Security and Net Zero previously only stating it would be made in due course.

 

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