Britishvolt factory plans scrapped for Blyth Power Station site with £10bn data centre project now lined up

Britishvolt, the company behind the gigafactory plans, collapsed in January 2023, and takeover plans by Australian startup Recharge have also faltered.

Northumberland County Council’s cabinet will now consider backing a new sale of the 235-acre former Blyth Power Station site in Cambois, officially known as Northumberland Energy Park 3, to American asset management firm Blackstone.

£10bn will be invested by the firm for cloud and AI data centre company QTS, which is owned by Blackstone, to build the largest data centre in Europe at the site.

A further investment of between £5bn and £10bn is expected from the data centre’s future tenant, likely a tech giant such as Google or Microsoft, but the proposals are at too early a stage for discussions with potential tenants to have taken place.

In all, the proposal is forecast to have a £5bn economic impact on the area.

The new deal hinges on the council’s cabinet agreeing to withdraw the option to buy back the site for £4m should development milestones not be met at a meeting next week, and the proposed deal involves a £110m payment to the council to do so.

Council leader Glen Sanderson said: “Driving growth and jobs is a key priority for this council. Next week, cabinet will consider this really unique opportunity for Northumberland which offers a huge boost to the regeneration and renaissance of the local area.

"The project would represent a significant inward investment of up to £10bn, putting our county at the forefront of developments in the digital economy and delivering over 1,600 direct jobs, including 1,200 long-term construction jobs and over 2,700 indirect jobs over the course of the development.

“If agreed, the council would receive up to £110m in exchange for amending the buy-back option on the site and use the proceeds to establish a fund that will drive investment, including in the economic corridor along our fantastic new Northumberland Line.

“Through the council’s investment company, Advance, we have worked tirelessly to make this site such an attractive place for global companies to do business. We look forward to considering this opportunity at cabinet next week.

“Northumberland is indeed a land of great opportunities and this potentially significant investment opportunity underlines this.”

A Blackstone spokesperson said: “Blackstone and QTS have the capital, expertise and track record required to deliver on growing demand for data centre infrastructure.

"We applaud the council’s focus on revitalising a stranded site and we look forward to engaging with them and the wider stakeholder community as we progress this meaningful potential investment.”

Reaction to the announcement

Labour MP for Wansbeck Ian Lavery, whose constituency includes the site, said: “Whilst it has been inevitable for some time that the investment we were promised was not coming, the withdrawal of plans for battery manufacturing on the Cambois site is incredibly disappointing.

"I am, however, cautiously optimistic at today’s news and look forward to meeting those behind the latest plans.

“Unlike previous proposals for this site, the one currently on the table does seem to be backed by actual capital.

"Local people have been let down on multiple occasions and we will be watching how this progresses carefully.”

Ian Levy, MP for Blyth Valley, said: “I have worked closely with the council and government at every stage to ensure the best possible outcome for the Blyth Estuary, south east Northumberland, and the wider region.

"The initial construction jobs and then the longer-term jobs on the site will continue the transformation of our area and I will be doing everything I can to make sure that as many of these jobs as possible go to local people.

"The spin offs for education and skills development will be outstanding. This is a great example of a Conservative council working with a Conservative government to bring opportunity and transform an area and I am very proud to have been able to play a part in this.”

What happened to Britishvolt?

Northumberland County Council purchased the site for £4m in Spring 2021 and immediately sold it on to Britishvolt for the same amount, with the intention that the start up would raise £3.8bn to build an electric car battery factory there.

The project struggled to get off the ground however and Britishvolt entered administration less than two years later, with Ernst and Young appointed as administrators.

An investment firm also appointed Begbies Traynor as Law of Property Act Receivers after its loan to Britishvolt had been secured against the site.

Australian start up Recharge Industries was selected as the preferred candidate to take over Britishvolt by administrators, but the firm has not made any progress with the site and is overdue on its final payment to EY.

A winding up petition filed against Recharge in March was published in The Gazette today, Monday, April 15, and will be heard at the High Court in London on May 1.

Bob Maxwell of Begbies Traynor said: “From a difficult situation, the future sale will ensure a very bright future for the site.

"The process of securing a dependable buyer who has a clear, deliverable plan for the long-term use of this strategically important land asset was crucial after the failure of the last business at the site, and was a key factor in gaining the approval of Northumberland County Council, who held options on the site.

“This transaction ensures that a well-funded and respected new owner can bring the enterprise and employment to the site that it deserves, and will be a huge boost for the whole region.

"Its scale and location make it perfect as the location for a European data hub and the plans put forward will hopefully kick-start an entire tech industry cluster in the North East from the site.”