National Grid, the FTSE 100 power network owner, has reportedly agreed to buy land on Teesside to build Britain's largest electricity substation, according to Sky News.
National Grid Electricity Transmission signed a deal last week to buy more than 70 acres at Dorman Point, a site owned by Teesworks, a local public-private partnership.
Sources told Sky News the substation would power a neighbouring data centre that is likely to be the largest in Europe.
A substation converts high-voltage electricity from the national grid into a form that homes and businesses can use.
The Teesside site has attracted interest from US artificial intelligence (AI) developers and hyperscalers, the technology giants that run vast cloud computing networks.
One industry source said competition for the site could lead to an investment decision with a preferred partner within months.
Delays in connecting to the grid have become one of the biggest obstacles to industrial development in Britain.
Matt Pearce, National Grid's head of lands, said the agreement was "an important step forward" for the substation.
He said it would support the growth of AI and the region's industrial development.
The government described data centres as fundamental to the economy in a policy statement published alongside last week's budget.
