Ed Miliband sidelined as Prime Minister backs AI over hydrogen
Energy Secretary Ed Miliband has been sidelined in a high-profile Cabinet row after Prime Minister Sir Keir Starmer chose to back plans for a massive data centre on Teesside instead of a major hydrogen energy project.
The move has been seen as a blow to Mr Miliband’s net zero agenda, raising questions about how much influence he holds in government decision-making.
(The Telegraph, 12 September 2025)
Prime Minister overrules Energy Secretary
The hydrogen scheme, known as H2Teesside, was proposed by BP and supported by Mr Miliband. It would have produced “blue” hydrogen, supplying up to 10% of the hydrogen Britain is expected to need by 2030.
But the Prime Minister has backed a rival plan for Europe’s largest data centre on nearby land, declaring the Teesworks site an “AI growth zone.” The two projects were judged to be incompatible, effectively ending hopes for the hydrogen plant.
The decision was confirmed in a letter from Business Secretary Mr Peter Kyle to Tees Valley Mayor Lord Houchen, which described the data centre as “the cornerstone of the UK’s AI strategy.”
A Cabinet clash over priorities
Mr Miliband had delayed a ruling on the hydrogen project until the end of October, seeking more information and keeping the option alive. He also held the power to grant a development consent order, which could have forced the project through.
Instead, Sir Keir moved first, with the designation of the AI growth zone effectively shutting down the plan his Energy Secretary supported. Reports suggest that the Department for Science, Innovation and Technology even prepared legal advice in case Mr Miliband tried to push ahead.
The outcome has been interpreted as Sir Keir putting his authority above Mr Miliband’s, choosing technology investment and AI growth over a central part of the Energy Secretary’s climate policy.
BP left in limbo
BP has said it remains committed to H2Teesside and continues to hold talks with the government, though it admitted the plant does not yet have a main customer. The company has argued that the project should not be blocked by “speculative development.”
For now, both BP and the wider energy sector are left uncertain, with Mr Miliband’s flagship plan set aside in favour of Sir Keir’s AI strategy.
Net zero or AI?
The decision underscores the tension inside government between meeting net zero pledges and building up Britain’s artificial intelligence sector.
Sir Keir is keen to demonstrate commitment to AI as he prepares to sign a “technology partnership” with US President Donald Trump next week.
A government spokesman defended the decision, saying: “Any infrastructure decision this Government makes will be in the national interest – helping deliver the Government’s Plan for Change.”
Lord Houchen has warned that Britain “cannot afford to dither and delay” in the race to attract AI investment, and argued that the hydrogen project would have had a “sterilising effect” on the Teesside data centre.
But the sidelining of Mr Miliband highlights a Cabinet divide – and raises doubts about how far net zero goals will be prioritised when they come into conflict with the Prime Minister’s technology ambitions.