- Storelectric has acquired approximately 550 acres on Teesside and a further 60 acres at Wilton International from SABIC UK Petrochemicals.
- Part of the site is intended for a 50 MW compressed-air storage project capable of operating for 30 hours.
- Site ownership removes an important development dependency, but the scheme still requires a final Ofgem award, approvals and financing.
Storelectric has completed the acquisition of an extensive former petrochemical site on Teesside, securing the land and underground salt caverns to host a 1.5 GWh compressed-air energy storage project.
The transaction with SABIC UK Petrochemicals covers approximately 550 acres near the Seal Sands industrial cluster and a further 60 acres at Wilton International. Storelectric has renamed the larger location Tees Energy Park and plans to use it for long-duration storage, hydrogen and other energy infrastructure.
A portion of the site has been allocated to TeesCAES, a proposed compressed-air energy storage plant with 50 MW of power capacity and a 30-hour discharge duration. The company did not disclose the acquisition price.
“Completing this acquisition is another important milestone for Storelectric,” managing director Tallat Azad said in the company’s completion announcement.
The acquisition was independently confirmed by legal adviser Womble Bond Dickinson, which acted for Storelectric on the transaction.
Compressed-air systems use surplus electricity to compress air and store it underground – in this case in salt caverns. When electricity is needed, the air is released and used in a power generation process. The approach can store much larger quantities of energy for longer periods than many conventional battery projects, although its performance depends heavily on cavern geology and plant design.
TeesCAES is one of 16 projects provisionally selected under the first window of Ofgem’s long-duration electricity storage cap-and-floor scheme. It is the only compressed-air project on the list, which also includes pumped hydro, lithium-ion batteries and vanadium redox-flow batteries.
The regulator selected the projects from more than 170 initial applications. To qualify, schemes must be capable of delivering electricity for at least eight hours. Final decisions are expected later in 2026.
Under the regime, a revenue floor would protect qualifying projects if market income fell below an agreed level, with costs recovered from consumers. A cap would require developers to return excess revenues. The structure is designed to make capital-intensive storage projects financeable without guaranteeing investors an unrestricted return.
Development risk
Storelectric’s inclusion remains provisional. The company must agree detailed terms and demonstrate that the project represents value for consumers before it receives a contract. Planning, engineering and financing also remain outstanding, meaning the acquisition should not be confused with a final investment decision.
Nevertheless, ownership of the land and cavern assets removes a significant development risk. Storage projects can spend years negotiating access to suitable geology, industrial infrastructure and grid connections. Control of a large site also gives Storelectric room to expand or add related projects if the first plant proves commercially successful.
The power rating of 50 MW is modest compared with pumped-storage stations such as Dinorwig. TeesCAES is differentiated by duration: 30 hours would allow it to move substantial quantities of electricity across several daily peaks or help cover longer periods of low wind generation. At full output, the proposed plant would supply 1.5 GWh.
Its strategic value will depend on how efficiently the system stores and returns electricity, how frequently it operates and whether market revenues reward duration rather than simply power capacity. Compressed-air projects have historically faced challenges over construction costs, thermal efficiency and limited access to suitable caverns.
The Teesside location offers advantages. Existing salt caverns, industrial skills and energy infrastructure could reduce development requirements, while the region’s planned offshore wind, hydrogen and carbon storage projects may create demand for flexible electricity and gas storage.
Storelectric’s acquisition therefore turns TeesCAES from a project dependent on third-party site control into one backed by owned physical assets. The more decisive milestones still lie ahead; a final Ofgem contract would establish the revenue framework, while planning consent and financial close would determine whether the caverns become an operating part of Britain’s power system.
