Miliband clashes with Starmer over net zero project

Keir Starmer’s support for plans to build the largest data centre in Europe threatens to undermine Ed Miliband’s green ambitions - Ian Forsyth/Getty Images

Ed Miliband is locked in a battle with Sir Keir Starmer over the Prime Minister’s support for plans to build the largest data centre in Europe.

The Energy Secretary is at odds with Downing Street and other Cabinet ministers over a flagship infrastructure project in Teesside that threatens to scupper his net zero ambitions.

Tensions have escalated to such an extent that Peter Kyle, the Technology Secretary, has drafted in lawyers to explore if there are ways to block Mr Miliband from backing BP to build a hydrogen plant in the same area.

It comes after Downing Street selected a former steel site in Teesside as the home for its second AI Growth Zone, with Labour banking on the technology to help turbocharge the economy.Tech Secretary Peter Kyle is exploring whether there is a way to block Ed Miliband from backing BP to build a hydrogen plant in Teesside - Chris J Ratcliffe/Bloomberg

Ministers are desperate for policies that will help kickstart growth ahead of an autumn Budget where Rachel Reeves, the Chancellor, is expected to announce more tax rises to help balance the books.

However, the competing projects in Teesside have exposed a growing rift at the heart of government over the future of energy and critical infrastructure in Britain.

Sir Keir has claimed that AI will help the Government deliver a “decade of national renewal”.

But Mr Miliband has vowed to deliver a clean power system by 2030, a policy that has drawn private criticism from other Cabinet ministers who fear he is pushing too hard to hit net zero.

While the Department for Science, Innovation and Technology (DSIT) wants to grow Britain’s tech sector, an official announcement on a new data centre has been partly held back by objections from Mr Miliband.

This stems from concerns about the energy and water consumption at the site, which would have implications for Britain’s climate and sustainability goals.

Sources said DSIT had instructed lawyers in the last three weeks to explore ways to stop Mr Miliband from backing BP’s hydrogen plant.

The Energy Secretary faces a deadline this Thursday to decide whether he will grant the oil major consent to start producing “blue” hydrogen from natural gas, and then capture and store the carbon emissions.

A so-called development consent order (DCO), in which ministers make planning decisions for nationally significant projects, would also include rights to compulsorily purchase land.The H2Teesside scheme was announced by BP in 2021, with plans for enough energy to power 1m homes

The H2Teesside scheme was announced by BP in 2021 and had been slated to deliver more than 10pc of a plan for a clean power system by 2030.

However, The Telegraph revealed in May that BP was considering scaling back or even cancelling the 1.2-gigawatt project, which was expected to generate enough energy to power a million homes.

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This stems from concerns that BP is struggling to secure sufficient interest from customers to make the investment worthwhile. Chemicals giant Sabic, which was expected to partner with BP, announced the closure of its site in North East England in June.

However, sources close to the company signalled that the company remained committed to the project.

H2Teesside has already traded legal barbs with Teesworks, the public-private partnership that is developing the site.

H2Teesside insisted that the two projects were “incompatible” and called into question claims by Teesworks that the project would create hundreds of jobs.

The two proposed sites are on overlapping plots of land, making the projects incompatible.

The Energy Department also accepted a late submission from South Tees Group outlining why the project should be rejected.

However, the decision to grant the project lies with Mr Miliband.

It is understood that Treasury officials are examining a further relaxation of planning rules to help bolster the delivery of data centres.

Downing Street sources tried to play down a rift and insisted Sir Keir would never seek to influence the decision-making process.

A BP spokesman said: “We are working closely with the Government to progress the H2 Teesside project, with the next significant step being to complete the DCOprocess.

“There has already been significant work done on engineering design and detailed design will be the next step once a DCO is awarded. As part of the DCO process for the project we continue to engage with relevant stakeholders about our proposals.”

A government spokesman said: “Any infrastructure decision this government makes will be in the national interest – helping deliver the Government’s Plan for Change.”

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