Google has been linked to be in talks with the UK government over the construction of its 5 million sq ft data center in Teesside. The data center however is facing numerous challenges. One of the major being other proposals of what the plant should be used for. The ambitions of both parties to strike a deal by Christmas is at risk following a cabinet row on the field’s plans. Energy secretary Ed Miliband is backing BP’s proposal to construct a hydrogen plant instead.
However, reports note that the tech giant is in talks with Teeswork, which is behind a 4,500 acre brownfield regeneration project. In July 2025, reports emerged that the UK government was planning to convert the former steel site in Teesside into a data center project, aiming to establish its second “AI Growth Zone.” Moreover, it was said that the Department for Science, Innovation and Technology was closely involved in negotiations. They did not mention the major investor linked to the project though. Other than Europe’s largest data center, Google is also linked with Asia’s largest data center in India.
Project Factsheet
Description & Latest Updates:
- Google was linked in July 2025 to talks with the UK government over a 5 million sq ft data center in Teesside.
- The project is intended to convert part of the former steel site into the UK’s second AI Growth Zone.
- In August 2025, the data center won planning permission from Redcar and Cleveland Council, with a second detailed application still required.
Significance:
- Would be one of Google’s largest UK data infrastructure investments.
- Aims to support the UK’s ambition of becoming a global AI hub.
- Forms part of Teesworks’ 4,500-acre brownfield regeneration project.
Developer & Stakeholders:
- Google is the expected end-user investor, though not yet officially confirmed.
- Teesworks Limited and South Tees Development Corporation are leading regeneration efforts.
- The UK Department for Science, Innovation and Technology is directly involved in negotiations.
Challenges:
- BP’s counterproposal to build a blue hydrogen plant (H2 Teesside) is backed by Energy Secretary Ed Miliband.
- Hazardous “inner zone” from hydrogen production could block data center development nearby.
- Cabinet disagreements and competing visions for the site put a deal by Christmas 2025 at risk
The Challenges Facing Implementation of Teesside Data Center Project
Despite all signs indicating a positive trajectory on Teesside data center project, there are hurdles that still emerge. One of the main challenges is BP’s alternative proposal to use the location as blue hydrogen plant. Moreover, they also aim to use it as carbon capture plant. The company wants to use part of the land to build the blue hydrogen plant, H2 Teesside. Blue hydrogen uses natural gas as part of its production process, but is considered a low-carbon form of energy.
However, Teesworks Limited, along with another group, the South Tees Development Corporation, objected to the plan. They noted that the proposed ‘inner zone’ for hazardous installations would impose planning restrictions. This would make it impossible to build a data center nearby, something that would be required as part of BP development. In August, the data center won planning permission from Redcar and Cleveland Council. This meant a second, more detailed application will be required. At that time, no end user was named.
