The site, near Cambois in Northumberland, where Britishvolt failed to build a battery factory, is to be bought by US private equity firm Blackstone Group.
In the proposal submitted to Northumberland Council, the cabinet is asked to amend the existing buy-back option on the Northumberland Energy Plant site and re-enter an agreement with Blackstone. The deal would result in a £110 million “growth and investments endowment fund”.
Receivers for one of the Britishvolt companies, Bob Maxwell and Julian Pitts of Begbies Traynor Group, told the Guardian that Blackstone planned to turn the site into “one of the largest data centre facilities in western Europe”.
A blow to domestic battery production
Britishvolt emerged in 2019 with an ambitious plan to build a car battery gigafactory to rival the Chinese-owned AESC plant in Sunderland. Promising to generate as many as 3,000 jobs, Britishvolt won tens of millions of pounds of private investment but failed to secure the orders necessary for further funding.
In January 2022, then-Prime Minister Boris Johnson hailed the startup’s plans, and Britishvolt became a flagship of his levelling up policy. The government promised a £100 million subsidy to the company.
By August of the same year, the Guardian reported that construction of the 30GWh factory had been put on ‘life support’. Britishvolt collapsed into administration in 2023, a year before the first batteries were due to be produced.
With the UK government’s cap on new diesel and petrol cars set to begin in 2035, domestic EV battery production is a fundamental part of the path to net zero. Britishvolt’s failure was a blow, and the land purchase decreases available space for similar gigafactories to be built in the UK.
The deal with Blackstone would end efforts to find a company willing to buy the site for an EV battery factory. Jaguar Land Rover owner Tata Motors previously expressed interest in the site, the FT reported last year, as well as other carmakers and wind turbine makers.
A spokesperson for Blackstone told the BBC: “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.”
The group acquired QTS in 2021 and committed to increased spending on data centres last July. It’s assumed that QTS would operate the new hyperscale data centre, though no details have been made public.
Data centres’ environmental impact
There is a vast global demand for data centres driven by digital content and information and an increasing demand for cloud internet services and AI.
Environmentally, the incredible scale of energy use by data centres means sustainability is a fundamental question in their development.
As such, the Northumberland location would at least benefit from being connected to local renewable energy sources, including offshore wind.
The deal secures the future of a large brownfield site in a somewhat deprived area of the UK but likely won’t deliver the number of jobs the council had hoped and that Britishvolt promised.
Maxwell of Begbies Traynor said of the Blackstone deal: “From a difficult situation, the future sale will ensure a very bright future for 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 massive 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 kickstart an entire tech industry cluster in the north-east from the site.”
Local councillor Scott Dickinson said in a statement: “While the failure of the Gigafactory project and the subsequent job opportunities is disappointing, the new proposal shows promise in potentially creating over 1500 jobs.”
Ian Lavery MP also shared thoughts on the withdrawal of the gigafactory plans, calling developments “incredibly disappointing”.
However, he did say that he is “cautiously optimistic about today’s news and looks forward to meeting those behind the latest plans.”
