Energy transition: Opportunity, risk and reality

The energy transition is often framed as a decisive shift from hydrocarbons to renewables. In practice, it is proving to be far more complex. Rather than a single event, the transition is emerging as a gradual and uneven rebalancing of the energy system—one that must carefully reconcile decarbonisation ambitions with security of supply, affordability and economic stability.

In this episode of Podcasts by Brodies, Malcolm Gunnyeon and Martin Ewan discuss this tension, which sits at the heart of the energy industry’s current challenge. From skills transfer, investor confidence and geopolitical instability, what is next for the UK and the energy transition? 

They explore the findings of Brodies’ Energy Transition Investment Report, which highlights the realities of the transition to net‑zero and the investment trends shaping the next phase of global and UK energy development. 

Listen to the first episode of our energy transition podcast series 'Evolution not revolution: Investing in the energy transition', featuring Clare Munro, Keith Patterson and Sarah-Jane Macarthur now. 

All information in this episode was correct at the time of recording. The content of Podcasts by Brodies does not constitute legal advice. 

Transcript

00:00:06 David Lee, podcast host

Hello, and welcome to Podcast by Brodies. I'm your host David Lee and today we're talking about the complexities of the energy transition.

Brodies released a report, Evolution not revolution: Investing in the energy transition, in April. It showed that this is no linear binary shift from hydrocarbons to renewables, but more of a gradual, uneven evolution of a system that has a difficult balancing act to find, balancing decarbonization with security of energy supply, affordability, and economic stability. No easy feat.

The report shows investment momentum is accelerating across renewables, energy storage, and grids,

but that conventional energy remains integral to the system. And oil and gas infrastructure still underpins energy resilience, investor confidence, and the skills needed to build low-carbon projects at scale.

In the UK, we've seen policy adjustments that revive confidence in offshore wind and storage. But the North Sea supply chain is still feeling the strain of the rapid change of fiscal uncertainty and of impact on the workforce.

So, so much to discuss today, and we're focusing primarily today on three words, opportunity, risk and reality.

And I'm joined by two Brodies experts. Martin Ewan is a corporate and commercial partner, and Malcolm Gunnyeon is a partner specialising in dispute resolution, risk and health and safety.

To you both. Lots to talk about. We'll start with skills and this idea that's been said many, many times on public stages that oil and gas workers have transferable skills that can map across easily to the renewables industry.

Now, Martin, some commentators make it sound a bit like a cut and paste job, but it's much more complicated than that.

00:02:03 Martin Ewan, partner at Brodies LLP

Yeah, I think it is. The first thing to say is that Aberdeen's developed over the last 40, 50 years, their reputation as the oil capital of Europe, a hard won and well-deserved title at the time. And the question for Aberdeen and surrounding area, and the local industry is whether we can parlay those skills over into the renewables and ancillary industries that are coming next. Because we've always known that fossil fuels are by definition a finite resource and that there has to be an end to it.

So yeah, in an ideal world, Aberdeen becomes the energy capital of Europe and continues in those new energy vectors. And when I talk about the other - It's not just renewables, which I think you mentioned the question, David. It's also things like hydrogen, carbon capture, those kind of things. Solar is not terribly popular in Scotland for some obvious reasons relating to our weather. But when you look at the industry sectors, there's a huge amount of opportunity for us going forward.

00:03:10 David Lee, podcast host

OK, so let's talk about some of those opportunities in a bit more detail, Martin, some of the skills that are transferring over.

Where are the areas where you see particular transferable expertise between old and new energy, if we can use those rather simplistic terms?

00:03:28 Martin Ewan, partner at Brodies LLP

I guess fundamentally, all of these different industry sectors that I’ve mentioned require a huge amount of engineering capability. So, there’s a core engineering skill set. Obviously, there are particular nuances and specialisms, whether you’re doing oil and gas versus renewables versus hydrogen and so on.

But the core engineering skill set is at the heart of that. There will be jobs for engineers across all of those, obviously with some retooling and some reskilling as appropriate. All the other kind of project management skill sets, the back office, I guess, the legal, the accounting, the HR, all those kind of jobs and skills that operate and underpin the industry, they can transfer across probably more readily than what I call the frontline, IT services, all those kind of things. So, there are a huge amount of opportunities in there.

00:04:25 David Lee, podcast host

Okay, thank you.

And coming to you Malcolm, let's just have a look at the other side. As Martin said there at the end, huge opportunities, but also some risks.

Where do you see the mismatches between the existing skills and the skills that we need for all the emerging technologies?

00:04:45 Malcolm Gunnyeon, partner at Brodies LLP

I think whenever you're looking at a change in a way of working or the introduction of a new technology. And I guess here things like hydrogen, carbon capture are excellent examples, you are going to have different risks.

Perhaps the risk profile of an activity will change and therefore there is a mismatch or at least a skills gap between the skills of the current workforce and what they will need to have to deliver new pieces of work, new projects safely.

For example, working offshore on a drilling rig is very different to working offshore on a wind turbine because generally smaller numbers of people work on a turbine so there's more isolated lone working that has different risk considerations. It's more difficult to get access to the turbine. It's not as easy as landing a helicopter on an oil rig, not that I'm suggesting landing a helicopter on an old rig is an easy thing to do.

So, there are definitely new considerations that whichever workforce is responsible for operating and maintaining this new infrastructure, they'll need to factor in.

But what I think is important for Aberdeen and for the North East is that I think it's almost undeniable that the workforce that has been involved in delivering oil and gas projects for the last 30, 40 years incredibly safely.

Is the workforce best placed to manage that gap to face the challenges of the renewables sector? So yes, it's a challenge. It's new risk coming on.

But I think the bigger risk is if we don't. And when I say we, I mean those of us living and working in the Northeast. If we don't seize the opportunity to become, as Martin said, the energy capital of the world, the workforce will come from elsewhere in the world and perhaps from a jurisdiction that doesn't have a sophisticated and mature health and safety and regulatory regime as we do.

So, we can't let the fact that there is a gap to bridge put us off seizing that opportunity because I think we are the jurisdiction in the world best placed to take the opportunity.

00:06:58 David Lee, podcast host

Okay, thank you. If that transition isn't handled well, Malcolm, there's been a lot of stories around obviously about job losses in the North Sea and in the North East of Scotland as a result of the, well, job losses across the oil and gas industry.

What might the failure to carry out this transition effectively mean in the longer term in terms of jobs, and talent more generally?

00:07:29 Malcolm Gunnyeon, partner at Brodies LLP

The transition is going to happen, isn't it? There is now no doubt that we are moving from traditional oil and gas over the next 15, 20 years to a renewable energy industry.

So, there is going to be a global demand for skilled workers, whether it's in safety roles, whether it's in operational management roles, there's going to be a demand for people who can work in the renewable energy sector for the next 30 or 40 years.

if we don't get it right in the UK and we don't position ourselves as the place where those workers will come from, then either of those workers will leave the UK and they'll go to wherever has become the energy capital of the world, meaning that we lose that tax revenue, we lose those people from our local economy, the disposable income.

That's one possible outcome, the other is that actually those people do manage to make the move elsewhere.

And in fact, the local workforce from wherever does become the energy capital become the future workforce in the offshore renewable sector.

And then we'll find ourselves in 20 years’ time looking at that city or that region and saying, what did we get wrong? How did we allow this to get to a point where we had that within our grasp?

And it's now, we can see the benefits it's giving to whether it's Houston or wherever else it might be in the world.

So yeah, we get this wrong and it has huge, huge impact on us as a country, on the people who live and work in the Northeast but also has an impact on the sector because they will lose talented, experienced people.

00:09:13 David Lee, podcast host

Okay, Martin, would you like to comment?

00:09:14 Martin Ewan, partner at Brodies LLP

I was just going to say, I think that's absolutely right.

And the problem with this transition, I think, again, in your intro, David, you mentioned it was uneven. And the problem is one of sequencing that it's not immediately obvious.

We've got a, if you think in pictures, a graph of the oil and gas industry depleting and a converse graph of renewables and hydrogen, carbon capture, everything else taking off, but they don't neatly map together.

So, what we're in danger of doing is if the oil and gas industry ceases too early and those skilled individuals, whether they're doing large scale project management or offshore engineering, any number of skill sets that would be highly desirable in the future world if they have lost their job in the meantime or migrated elsewhere because the opportunities aren't here. Then we just have a question of timing and the phrase, the London Underground phrase, ‘mind the gap’ has been used because it's that gap between where oil and gas comes down and renewables and adjacent sectors rise.

And that's quite a conundrum. And I think it's only one that policy can fix, government can fix, because they need to pull sort of macro levers to make sure that they're never going to dovetail completely, but there's not too big a mismatch.

00:10:39 David Lee, podcast host

Yeah, and now we've all got that slightly disembodied voice as we climb off a train, mind the gap, kind of resonating in our ears.

Just to use that phrase, Malcolm, mind the gap, what about the potential investment gap? If we don't get the talent shift right, what's the potential in terms of the investor appetite and confidence in the energy sector?

00:11:04 Malcolm Gunnyeon, partner at Brodies LLP

I think that's the key word, David. It's confidence.

If you are an investor sitting now thinking, I want to invest in the energy supply chain, we need to give those investors confidence that the UK, that the Northeast is the place where they can confidently make that investment.

And if we are very obviously managing our talent pathway, we're upskilling where required, we're reskilling and there will be an element of reskilling required. But we have a very clear plan, a very clear trajectory towards having all those skills gaps filled, then we give those investors’ confidence.

If we don't give them that confidence, they will inevitably and understandably look elsewhere and place that investment where they do see that either that confidence or at least that ambition.

So, I think we need to show a desire to embrace the transition and ambition to achieve the fulfilment of the skills gaps and confidence for investors.

00:12:08 David Lee, podcast host

And linked into confidence there, Malcolm, is this idea of perception as well of what's going on that whenever we're talking about anything to do with industry or politics. That market confidence, that market perception is crucial.

So, in this particular context of the energy transition and the skills transition, what role is market perception and broader public perception playing, do you think?

00:12:37 Malcolm Gunnyeon, partner at Brodies LLP

I think public perception is probably the most important and the most difficult, the title of the report probably sums it up. Some people believe this is a revolution, that we switch off oil and gas and we become renewable overnight, entirely reliant on renewables.

Others believe we should carry on and drill baby drill for the next 20 years and we'll worry about renewables then. And I think we have seen that polarisation of debate, both in the political arena but also in the public arena, we see it in discussions around the city here.

There's a whole range of views and I think the perceived wisdom is that the right point is somewhere in the middle where we need to have a reliance on oil and gas for a period of time as we shift that balance.

So, getting the public to understand that is actually the only way we can achieve a long term, and sustainable transition is really important because that then feeds into how people might vote in elections over the next five to ten years. How they will choose to try and influence political decision making. If there is more of a robust understanding amongst the public, it might make some of the political decisions easier.

So, I think before we move on to market perception, that public perception and how it influences the way that political decisions are made and political debate is conducted. If we get that public perception right, I think that that naturally feeds into changes that will give the market more confidence and things that Martin will see in his world where investors will understand that the UK is a place where they can confidently invest in the transition.

00:14:23 David Lee, podcast host

We talked in the intro, Martin, about some of those tensions and one of the big tensions. And if you like, two of the big kind of political issues of our time, potentially intention, are net zero targets and energy security.

How do you see that playing out, particularly from that investor perspective?

00:14:43 Martin Ewan, partner at Brodies LLP

Yeah, I mean, I think you're absolutely right. It is probably one of the political questions of our time.

It's a political football that's been kicked around both of these points. In terms of investors, I think it's an ‘and’ not an ‘or’. In the same way as oil and gas does not need to be set in opposition to renewables, there's a continuum here and it's the same for investors.

I think there's a world in which investors who want to invest in clean power infrastructure and the related sectors. And the report I think it's about $200 trillion of investment going into clean power infrastructure. They can do that and those asset classes will be good investment vehicles for them and they can do that.

And if they want to invest, if they take a very... I'll call it old fashioned. I'm not sure that's quite the right word, a traditional approach and want to invest in oil and gas, for example, because they, for example, want to speculate on the oil price. And then they can still do that. They can still invest in oil companies either in the UK or indeed abroad.

I mean, I think there's no denying that if you wanted to invest in oil and gas, you might look more broadly globally at the oil and gas producing regions than just the UK.

So maybe the answer to your question depends on whether you're talking about investors with an exclusively UK lens or a broader global lens.

But the bottom line is that there are asset classes and deals to be done out there, certainly globally, in any and all of these, in sectors that will respond to any and all of these factors.

00:16:24 David Lee, podcast host

Okay, thank you, Martin. And we've touched there a little bit on energy security and obviously energy security has been right at the forefront of everybody's mind with the tensions in the Middle East.

So, let's talk a little bit about the growing desire for and focus on energy security in the UK and the impact that's having on the energy transition and maybe in a bit more detail. So, in the Brodies report, obviously geopolitical risk is identified as a big constraint on international investment.

But how might that play out in the longer term?

Will it accelerate or slow the energy transition?

And start with you, Martin, in which way or ways might what is happening actually accelerate the transition?

00:17:07 Martin Ewan, partner at Brodies LLP

So, I think there are a number of, there are two sort of classic strategic responses that you could have to this situation.

The first is the UK one where Ed Miliband has looked at the situation in the Middle East and he's doubled down essentially on the commitment to net zero because he thinks that by decoupling us as quickly as possible from the volatility of that commodity price that's in our best interest. So that's one strategic response I make no comment on whether it's right or wrong.

The other strategic responses can be seen probably across the Atlantic, where again, Malcolm's drill baby drill quote. They've taken the opposite approach, you know, encouraging as much oil and gas exploration as possible and indeed, as I understand it, rescinding offshore wind licences.

So those are the two possible responses, and the former is the one that answers your question about how it could be seen to accelerate the transition.

00:18:14 David Lee, podcast host

And on the other side of the coin, Malcolm, how might geopolitics slow the energy transition in your view?

00:18:23 Malcolm Gunnyeon, partner at Brodies LLP

I think Martin's already given us a good example of one way, hasn't he, where there's perceived to be a political opportunity afforded by that global uncertainty to move away from the energy transition. Whether that is because that's the mood of that electorate or because there's scepticism.

It certainly affords a political opportunity to change direction. There may also be difficult decisions to be made by countries that are perhaps further back in the transition process than the likes of the UK are. Where we can say we're going to double down and we're going to push through to get to a position where we have energy security. Because we've moved to a largely renewable based supply and we're not reliant on traditional oil and gas.

There may be those who see themselves as a long way away from being at the point where they can get to that reliance, either complete reliance or even significant reliance on renewables.

And I would imagine that there has to be some consideration given to whether they need to almost double down on their traditional energy supply. And say, in these times of uncertainty, we can't afford to be making our investments and making our political and fiscal strategies based on a move to renewable energy.

We need to stick with what we know and make sure we've got a secure supply as far as anyone can at the moment of traditional oil and gas.

So, there's those who will see it perhaps as an opportunity to make a political decision. And then I think there are those countries that may say we just don't have the capability now and with all this uncertainty to move through a transition, we've got to stick with the traditional energy sources that we know, and we feel we can rely on.

00:20:09 Martin Ewan, partner at Brodies LLP

And I would add to that that Scotland, and the UK are ideally placed to, we shouldn't be in a bind here. We have oil and gas resources, which is the first advantage, the natural advantage that we have. And secondly, we have the capability for all the offshore wind and onshore wind and tidal and wave and all the other stuff that we all know about that renewables can come. So, we should be absolutely ideally positioned for this.

00:20:41 David Lee, podcast host

Obviously, we've talked about geopolitical risk quite a lot. What about the very fact of energy companies operating in higher risk jurisdictions? You know, what does that mean in 2026 and looking ahead for oil and gas and for renewables? Because there is so much, there are a lot of high-risk locations out there.

00:21:07 Malcolm Gunnyeon, partner at Brodies LLP

There are. And I think from there are two perspectives for this. I think there's the financial higher risk jurisdictions that Martin's been talking about, where would investors look to invest their money. They want to invest in a lower risk jurisdiction where lower risk will be economic policy, political stability, some level of certainty as to the direction of travel, even if the politics of the government of the day change. So, I think all of that is an important consideration. 

The bigger concern and oil and gas is a risky environment that is going to be true for any form of renewable energy, but particularly the nascent technologies, carbon capture and storage and hydrogen.

And ultimately, if you are an operator or if you're a member of the supply chain, you don't want to be operating in higher risk jurisdictions from a safety perspective.

There's obviously the cost of human life if there's a major incident, and that is a massive concern for organisations. But equally, there's a reputational risk of operational safety issues and being seen to operate in an unsafe way.

So, you're right, there are many jurisdictions around the world where as the energy transition develops, the companies will be looking at these locations and wondering whether they can operate their, in a manner that manages that level of reputational risk. But that's where I think there's an opportunity for us here in the UK.

There's a level of risk in offshore operations that you cannot remove. But on the UK continental shelf, we have what is recognised globally as one of the best, if not the best, safety system, both in terms of operational safety and regulation of safety anywhere in the world.

So, if we recognise that those investing in renewable energy and all the new technologies will want to do that in a location, in a jurisdiction where the safety and regulatory regime is as low risk as possible, that is the UK.

And there's our opportunity to make sure that we take all of those attributes and showcase them on a global stage to ensure that we get the investment decisions that Martin has been talking about.

And for those that are the companies that do operate in the higher risk jurisdictions, then they should be looking to the way things have worked in the UK oil and gas sector for the last 40 years as a perfect example of how you manage risks in an inherently unsafe environment.

00:23:54 David Lee, podcast host

Okay, thank you, Malcolm. And you're talking there about higher risk jurisdictions more generally, just in terms of a very specific risk, the early part of 2026 has been dominated by the blockage of the Strait of Hormuz and the implications that has had in terms of the movement of shipping.

What are the implications for that kind of stranglehold on the energy industry, Malcolm?

00:24:27 Malcolm Gunnyeon, partner at Brodies LLP

I mean, there's so many. If you think even in my world about the safety responsibilities of employers towards their employees. If we are now entering a period of geopolitical instability where there are risks that employees on board vessels passing through areas like the Strait of Hormuz are at risk of you know, the vessel being attacked or blockaded.

These are factors that employers will have to take into account. And that will include UK companies who have employees working on board these vessels when they find themselves in these sorts of locations. There are the challenges of supply chain disruption and safety critical equipment perhaps being delayed on board a vessel that's stranded somewhere.

So, the need to have operational contingencies to ensure that if you can't get that equipment that you're not left with a job half done that's left in an unsafe condition. And yeah, there's a whole host of these risks that come out of any level of disruption. Safety systems, and well any kind of management system is based on predictability the minute you introduce any uncertainty into that process I think it has massive implications.

I guess the other factor for particularly the oil and gas companies, and it picks up on a point Martin made earlier on about the fact that you know one of the consequences of this uncertainty is a spike in the oil price. And significant profits for oil and gas companies and that I think brings me right back to the public perception point.

There are those who are perceiving that as profiteering and actually, as Martin said, it's just a function of supply and demand. But that shows that there isn't yet a complete understanding in the public as a whole of why the transition is important. How we're going to balance a need to rely on oil and gas with the geopolitical instabilities as we manage that move to renewable energy. So, a lot of it does come back to getting the public understanding of how complex this process is to a better level than it currently is.

00:26:48 David Lee, podcast host

Okay, thanks very much Malcolm.

Just to wrap up, we started this podcast by talking about three words. We talked about opportunity, we talked about risk, we talked about reality. We've touched on opportunities and risks a lot.

So, let's look at that reality of where we are at the moment and where we might be going. I'm not going to ask you to get your crystal balls out because there's quite a lot of risk inherent in that as we know.

But Martin, first of all, then Malcolm, where do you see where we are at the moment in this balance of risk and opportunity in this challenging environment?

00:27:25 Martin Ewan, partner at Brodies LLP

It is challenging. It is VUCA, the acronym, you know, volatile, uncertain, complex and ambiguous. It is absolutely all of those things.

But when I look at, again, the investment potential, the amount of dry powders, they call it, that private equity has to deploy. The deal volumes and deal values in all the different lean infra-asset classes that are being contemplated, and again, they're touched on in the report. There's still huge investment potential there.

The bit that gets me quite excited is the new technology that's coming in as well. We do quite a lot of work with the Net Zero Technology Centre and mentoring their tech startups and all of those startups are focused on trying to develop novel technologies which will reduce the carbon impact of processes or facilities. Working with those really clever tech people to solve the problems of tomorrow.

That's really interesting, and when you look at, again, if you take your crystal ball, the Internet of Things, the way that you could have all these interconnected systems which could control whether it's the power coming in from an offshore wind assembly into the grid, the storage capacity, the use could predict all these things, can switch them on and off automatically.

Those kind of really quite futuristic things are reality now. And a lot of the cool technology, whether it's wind turbine blade technology, whether it's air capture, carbon capture, these are really cool, cutting edge, clever people solving the problems that could save our planet fundamentally.

So, I get quite excited about that, and I can see the potential for investment there. The only thing we have to get right, and I say the only thing, like it's a small thing, the only thing we have to get right is the policy environment and I guess trying to navigate a global supply chain.

00:29:28 David Lee, podcast host

Just two small things there to overcome. Malcolm, just some final thoughts from you about where we are about the reality of the current situation.

00:29:39 Malcolm Gunnyeon, partner at Brodies LLP

I think the reality of where we are now is we're in that position that any football team would want to be at the end of the season. It is all still within our control, the trophy is there for the taking and by trophy, I mean the opportunity for the UK and the North East of Scotland to become that global energy hub.

If we do the right things, if we win our matches. It doesn't matter what anyone else does. We will succeed. We will become that global energy hub because we've got the companies, the skills, the supply chain here. So that's the reality and that's the opportunity.

The risk is that we don't seize the opportunity now, that we get distracted by geopolitical instabilities. We get distracted by political infighting or distracted by, or we lose investment to other jurisdictions.

So, it's within our grasp, but it won't stay within our grasp for that much longer because there are other countries who want to be that global energy hub. So, if I've got any advice for the UK, it's win the last two matches and make sure we take home the trophy and don't let it go somewhere else.

00:30:55 David Lee, podcast host

Thanks very much, Malcolm, for that football analogy. I guess it's a bit like, you know, we've got no VAR in the energy industry, but if we did, your message there is to avoid clear and obvious errors in terms of future energy policy. So, thank you very much to Malcolm Gunnyeon and thanks very much to Martin Ewan for brilliant insights today.

This was an episode in a podcast series called Investing in the Energy Transition and it's based on Brodies’ 2026 report on the subject.

If you'd like a copy of the report, please go to brodies.com/energy-transition/

You've been listening to podcasts by Brodies where some of the country's leading lawyers and special guests share their insights about major issues affecting businesses, organisations and individuals across the UK and beyond. To hear more, please subscribe to ‘Podcasts by Brodies’ on your favourite podcast platforms and for more information and insights please visit brodies.com.