Why this time our high hopes for crucial site may be justified
THE announcement of plans for a ‘hyperscale datacentre campus’ mark the latest in a string of projects that are aiming to bring jobs to the former Blyth Power Station site.
The power station operated until 2001 and was demolished two years later, leaving a site that had a number of significant attributes for potential employers: a large, mostly flat site with good transport links and proximity to a major port. Recent years have seen the addition of nearby renewable energy sources to make the site even more attractive.
That combination of factors attracted Britishvolt to the site in 2020, with the company having originally planned to set up in Wales. The firm said it would create 3,000 jobs, plus thousands more in its supply chain, with plans for a gigafactory that would provide batteries for the electric vehicle industry.
But the sheer scale of those plans meant at least £4bn was needed, and Britishvolt – a start-up that had only been in existence for about a year when its plans were first announced – never came close to raising that money. Though Government backing of £100m raised hopes that the ambitious plans might actually come to fruition, the company collapsed in 2023 having raised only a fraction of what it needed and still having no product and no customers.
Hopes were raised months later when Australian firm Recharge Industries was named as the company to take over the project. But the same problems arose again, and Recharge was said to be in default on its deal when it failed to make the final payment to administrators last August.
The switch to data centres – which provide the infrastructure for all of the country’s digital activities – will seem like a major departure, and the scheme is now set to bring in hundreds of new jobs rather than thousands.
But there is a reason to believe that this project stands a much greater chance of success and the Britishvolt/Recharge ‘jobs’ were never likely to be delivered.
New plans envisage the site being sold to Blackstone, which bills itself as the “world’s largest alternative asset manager” and has assets under management of more than $1trn. The company owns thousands of real estate properties around the world and more than 200 companies. In 2018, Blackstone helped fund a £1.5bn deal to buy all of the UK’s rail arches and its QTS firm – which will develop the site at Cambois – is the largest data center provider in the US.
As well as having the funds to pull off what will be a massive investment, Blackstone has also agreed a £110m payment to Northumberland County Council in exchange for it amending a buyback clause on the land. That will provide a ringfenced fund for job creation opportunities. Those credentials mean the hopes are now that this key site will not be seeing another false dawn.