BP has abandoned plans to construct a new hydrogen plant in Teesside after the local council and Prime Minister lent their support to an AI datacentre proposed for the same plot of land.
The oil major has written to the Department for Energy Security and Net Zero withdrawing its application for a Development Consent Order, noting that Redcar and Cleveland Borough Council has given primary consent to a 5.38 million sq ft datacentre.
While the firm said it believes “a solution which enabled co-existence” of both projects “could have been identified”, with the plans as they are, “the two proposals are incompatible on the same piece of land”.
BP’s £4.5bn plant would have produced 1.2 gigaWatts (billion Watts) of ‘blue’ hydrogen, which is made using natural gas and emits no CO2 as it burns. The project was seen as a key infrastructure project for Ed Miliband’s net zero plans, though the Energy Secretary had twice delayed a decision on the project.
This was thought to be linked to the Prime Minster and Business Secretary lending their support to an AI datacentre for the 4,500-acre site, which firms including Google, Amazon and Microsoft are said to have their eyes on.
The former steelworks is the largest brownfield development project in Europe, and now looks set to become the UK’s second designated AI Growth Zone as the government seeks to compete with US and Chinese dominance in this growing area.
