In the North-east of Scotland, the energy transition is a lived reality — shaping jobs, investment decisions and the future of a region that has been the bedrock of the UK energy sector for decades.
While the global commitment to net zero is now well established, the practical challenge lies in how that transition is delivered – especially in areas where oil and gas have long underpinned economic stability and employment. For the North‑east, that challenge is clearer than ever as demand for energy increases against a backdrop of infrastructure constraints and renewed geopolitical uncertainty, most recently reflected in unrest across the Middle East.
These global events serve as a reminder that energy is about far more than emissions targets alone. It is fundamental to economic security, affordability and resilience — both nationally and locally.
New research by Brodies, based on a survey of senior UK‑based investors, developers and advisers, suggests that the energy transition is increasingly being shaped by pragmatism rather than ideology. The findings point to a market that remains committed to decarbonisation but recognises that conventional energy is fundamental to progress.
Not an either‑or choice
One of the clearest conclusions from the research is that the transition cannot be framed as a simple choice between renewables and hydrocarbons. While investment in offshore wind, battery storage and grid infrastructure is accelerating, conventional energy continues to be critical to maintaining security of supply and economic stability.
This reality is particularly evident in the North‑east of Scotland, where oil and gas activity still supports a highly skilled workforce and a complex supply chain. These capabilities, built over decades, are not only relevant to the existing energy system, but are also transferable to emerging low‑carbon technologies such as offshore wind, carbon capture and hydrogen.
Investors increasingly reflect this in their strategies. Rather than stepping away wholesale from conventional energy, many are taking an integrated approach pairing growth‑oriented low‑carbon assets with disciplined exposure to infrastructure that supports reliability and cash flow during the transition.
Skills and workforce under pressure
For many in this region, the most immediate impact of the transition has been felt in the labour market. Recent years have seen job losses and uncertainty in the offshore sector, even as demand grows for similar skills in new areas of energy development.
The report highlights concern about the timing of this shift. A rapid decline in conventional activity, before alternative sectors can absorb the workforce at scale, risks dispersing skills permanently. That outcome would not only affect livelihoods but could slow delivery of low‑carbon projects and increase long‑term costs.
Maintaining a baseline level of activity during the transition is therefore seen by many as essential — not to delay change, but to enable it to happen in a way that retains expertise and supports long‑term delivery.
Investment remains strong but delivery is strained
Despite volatility in capital markets, interest rates and supply chains, investment appetite across the energy transition remains robust. Technologies that support flexibility and system resilience, particularly battery storage and digital infrastructure, are attracting growing attention.
However, delivery challenges are becoming more pronounced. In the UK, grid connection delays, planning complexity and supply‑chain constraints are increasingly impacting project timelines.
Policy clarity has improved in some areas, notably offshore wind, but uncertainty remains elsewhere. Ongoing debate around the Energy Profits Levy continues to influence investment confidence and long‑term planning, with implications not only for oil and gas operators but for the wider ecosystem that supports energy projects of all kinds.
A global backdrop of uncertainty
Internationally, the research shows that capital tends to flow toward markets offering consistent, credible policy frameworks and realistic delivery plans. Regions such as Iberia and parts of Asia‑Pacific are attracting increased investment, while political volatility elsewhere has dampened enthusiasm.
This speaks to the fact that geopolitics is now a central consideration. Recent instability in energy‑producing regions has underlined the importance of domestic capability and diversified energy sources. For the UK, this reinforces the strategic value of maintaining a resilient, balanced energy system during the transition, rather than becoming more dependent on imports.
A region still central to the UK’s energy future
The North‑east of Scotland is not moving away from energy. Instead, it is navigating a complex period of change, built on the foundations of its existing strengths.
The research suggests that the success of the transition — locally and nationally — will depend less on headline targets and more on execution. Retaining skills, coordinating infrastructure investment, providing fiscal certainty and managing the pace of change will be critical.
Progress is being made, but the next phase will be decisive. How effectively the transition is managed in regions like ours will shape not only Scotland’s energy future, but the UK’s ability to deliver secure, affordable and lower‑carbon power for decades to come.
Read Brodies’ report ‘Evolution not revolution: Investing in the energy transition’ at brodies.com/energy-transition