Evolution not revolution: investing in the energy transition

In this episode of Podcasts by Brodies, we explore the findings of Brodies’ 2026 report, 'Evolution not revolution: investing in the energy transition'. Host David Lee is joined by Clare Munro, an energy partner specialised in oil and gas , Keith Patterson, a partner and co-head of renewables, and Sarah-Jane McArthur, a partner also with a focus on renewables, to unpack the report’s key themes.

We hear why the energy transition is not a simple shift from hydrocarbons to renewables, but instead a complex and gradual evolution. The conversation looks at the continued role of conventional energy in supporting resilience, the growing momentum behind renewables, and the importance of balancing decarbonisation with security and affordability.

From UK policy and market confidence to global investment trends and emerging opportunities, this episode provides insights into navigating a fast-paced and rapidly changing energy landscape.

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

Transcript

00:00:05 David Lee, podcast host

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

Brodies released a report, ‘Evolution not revolution: investing in the energy transition’ in Spring 2026.

It showed that this is no linear binary shift from hydrocarbons to renewables, but a gradual and even complex evolution of a system that needs to balance decarbonisation with security of energy supply, affordability and economic stability – no easy task.

The report shows investment momentum accelerating across renewables, energy storage and grids, but conventional energy remains integral to the system.

Oil and gas infrastructure still underpins energy resilience, investor confidence and the skills needed to build low-carbon projects at scale.

In the UK, policy adjustments have revived confidence in offshore wind and storage, yet the North Sea supply chain is still feeling the strain of rapid change, fiscal uncertainty and workforce impacts.

There's so much in this report and I'm joined by not one, not two, but three Brodies experts to discuss its high level findings.

Clare Munro is an energy partner specialised in oil and gas. Keith Patterson is a partner and co-head of renewables and Sarah-Jane McArthur is a partner also with a focus on renewables.

Welcome to you all.

And Clare, I'm going to come to you first just for a bit of background on the report, why this subject,

Why now and who did you talk to in putting the report together?

00:01:51 Clare Munro, partner at Brodies LLP

Hi, David. Yeah, well, there's obviously so much said and written on the subject of energy transition.

We did really think long and hard about what we wanted our contribution to be. It's a really very crowded space and some of what is said is emotive and some is lacking in substance.

So we wanted to add to the conversation, but in a really meaningful way. We knew what we wanted to do would have to be well researched, it would have to be well thought through and substantive and we're really pleased with the result.

Why now? Brodies is a full service law firm and we have a really experienced energy team. In fact, we had a renewable energy team before we had an oil and gas team join the firm. So we see the full spectrum of what's happening in the market.

And we can see the challenges being faced by our clients, both in the oil and gas sector and in the renewables sector. And this seems to be just such a critical time in the pathway to net zero for the UK.

It just seemed like a great opportunity to add some valuable data and also some insights into the mix.

And then just lastly, in terms of who we spoke to, as I said, we did want data-driven findings, so we worked with Infralogic. They gathered information for us from investors, developers, advisers, and also corporates, including GCs in that. And then six of our partner group assisted in kind of analysing that data, commenting on it.

So it really was a team effort pulling this report together. And as I said, I think we're all really happy with the outcome.

00:03:25 David Lee, podcast host

Okay, so Keith, coming to you.

As I've said, the title of the report, Evolution, not revolution – appreciating this is a highly complex topic that full day conferences are dedicated to – But can you explain briefly to set the scene why it's not possible for the UK to make this seamless, rapid shift from hydrocarbons to renewables?

00:03:51 Keith Patterson, partner at Brodies LLP

Thank you, David. I'll do my best to keep this brief.

I mean, basically it boils down to the transition comes in two parts, transitioning at the power system, so that's the electricity system, and then electrifying at transport and heat.

So currently transport and heat are met, energy demand is met by fuels. And then you have the electricity system.

The electricity system only provides about 25% or so of the overall energy use in the UK. So, transitioning the power system is complex in itself, and we'll come to that later in the podcast.

But that's only part one.

Part two is then electrifying transport and heat. And that is a huge infrastructural challenge because you have to build the power system that where the new power stations will be built in the places where there are renewable resources, not near the centres of demand.

So that means building lots of new network. And then when you electrify transport and heat, you need much bigger systems in the centres of demand. So you've got this huge infrastructural challenge of building it out that is just a multi-decadal effort.

00:05:20 David Lee, podcast host

Thanks very much, Keith.

And coming to you, Sarah-Jane. It's clear the energy transition won't be seamless, it won't be rapid, but there are plenty of synergies between conventional and renewable energy.

Again, there's lots to say here, but can you just summarise from your perspective what those main synergies are?

00:05:41 Sarah-Jane McArthur, partner at Brodies LLP

Thanks, David.

I think for context here, it is useful for a second to zoom out and do the science bit and remember that electricity can't be stored.

So the second it's produced, it needs to be used. In the UK, our key renewable technologies, wind and solar, also can't be stored. When the wind blows or the sun shines, the electricity is produced and it needs to be used or turned off.

The key benefit of fossil fuels is that they're chemical energy, so the energy stored in the molecules, it can be stored until it's needed, and when it's needed, it can be used.

And that attribute specifically complements the intermittent renewables that we have on the system.

We'll come on later to talk a little bit about batteries and hydro, low carbon forms of chemical and water storage, but those need really rapid ramp up of deployment, whereas gas exists now.and it will be required for some time to balance the intermittent renewables on the system.

And that's particularly important as demand increases, as Keith has alluded to with the electrification of heat and transport.

One final thing on synergies is, particularly in the UK, we have an amazing supply chain with engineering capability skills that have grown up around conventional energy.

And that resource can be pointed at renewables to help tackle challenges and achieve delivery at the very large scale that we need.

00:07:07 David Lee, podcast host

Okay, thanks very much. Very clear. And thanks for the science lesson there – that was very helpful to me personally.

Coming on to investment specifically, Keith, the Brodie's report said over the last two years, 88% of respondents completed at least one majority state transaction and three quarters made at least one greenfield investment.

So reflecting on some of those figures,

How do you see the opportunities that exist for investors in terms of ongoing deal making over the next couple of years?

00:07:41 Keith Patterson, partner at Brodies LLP

Right now, the UK is a very supportive framework, and in particular, that's contracts for differences, or CFDs, as they're called in the industry.

Essentially, a contract for difference means that an operator or developer of a wind farm or solar farm doesn't need to take power price risk.

And that means that it has more stable forecastable revenues and supports the cost of finance of those projects.

There's a lot of CFD auctions expected over the coming years. With the result, there's going to be a lot more investable assets around.

And investors really have three opportunities. There's the construction finance.

That’s just raising the finance to build the new wind farm or the new solar farm. And then our experience is most or at least a lot of assets are traded when they're greenfield assets before construction starts.

So there'll be an M&A opportunity at that point. And then many assets are also transacted after they are in operation. So there is really 3 investor opportunities.

And that's not  including investment in transmission and distribution, or indeed corporates and indeed data centres that we hear a lot about.

00:09:12 David Lee, podcast host

Okay, thanks, Keith. So there's lots of opportunities for investment there, but what about those broader kind of market conditions, Keith?

Do you think that the market momentum is moving still in the UK towards net zero and renewable energy projects?

00:09:30 Keith Patterson, partner at Brodies LLP

That's a good question and it comes with a yes and a no answer.

The yes part is the current policy is very favourable. CFD auctions are anticipated over the next three years and a lot of capacity is anticipated to be allocated.

However, the period of broad policy agreement amongst the different parties in the UK of the Theresa May era, that has gone and it is now apolitical.

There are different views in different political parties as to the extent to which renewables should be supported. There may be rational answers to all of that, but politics are now involved and so rationality is going out of the window.

Definitely we're seeing investors concerned about political risk. The one good point on that, though, is that contracts for differences are private law contracts. Private law contracts cannot be undone by policy dictat, and investors see that form of support as therefore immune – immune is maybe perhaps too strong a word – but certainly a strong safeguard against political interference at a later date after they've made their investment.

00:10:54 David Lee, podcast host

Okay, thanks Keith.

And Sarah-Jane, Keith mentioned there, touched on investor confidence, which is obviously hugely crucial in what we're discussing today.

Let's talk specifically in investor confidence in offshore wind.

Again, we've heard already a bit about contracts for difference.

Can you explain a little bit about how they work to support offshore wind and where we are in that process at the moment?

00:11:23 Sarah-Jane McArthur, partner at Brodies LLP

Of course. So in terms of investor confidence in offshore wind, I'd say that momentum is building again after some well publicised challenges a couple of years ago and that was that came through in the report.

The scale of ambition right now is clear.

There's around 16 gigawatts of offshore wind deployed in the UK with a target of 43 gigawatts by 2030.

Notwithstanding Keith's point on potential for political headwinds, the policy environment right now is very supportive.

And just again for some context, these projects are a significant investment, very roughly it takes around three billion pounds to build one gigawatts of offshore wind. And to date, those contracts for difference, or CFDs as we call them, supported billions of investment in gigawatts of deployment, not just in offshore wind, but also in onshore wind and solar.

The challenge with the CFD is that you price that revenue line quite some years ahead of deployment.

That revenue line, as Keith has said, is stable, it's index linked, but the costs aren't stable for these projects.

The supply chain has been responding to global demand and pressure with inflation and steel to produce the turbines, cables, civils, costs and vessels.

And all of this huge inflation plus cost volatility, particularly around the costs of grid charges, that means that the

A stable revenue line is being squeezed by the cost lines deepening underneath it, and it's making these projects less economically viable and therefore not worth the development risk that you need to take in order to make these investments.

So in 2023, some developers chose to hand back their allocation round four contracts and wait and bid again, and no projects bid in allocation round five.

But since then, we've had to bounce back.

Offshore wind projects were successful in allocation round six and seven, nearly five gigawatts in allocation round six, and over eight in allocation round seven.

And we're waiting now for allocation round eight to open in July 2026.

And again, we're hoping to see much more projects coming through in that round.

00:13:44 David Lee, podcast host

Okay, great. Thanks very much.

Again, really clearly explained there. Now, we've heard some challenges there, Keith. We're also hearing positivity about more offshore wind coming on stream.

But then as we go downstream, the grid challenges. Can you explain a little bit about the challenges of the grid and the planning system?

The report identifies grid connection delays as the biggest bottleneck to renewables delivery. Can you just tell us a little bit about why that is such a challenge?

00:14:15 Keith Patterson, partner at Brodies LLP

Sure. I mean, as I mentioned earlier, building out the network is a huge infrastructural challenge. But there is also an issue over access and the right to connect to the system.

How do you decide who is going to be connected first? Not who gets connected because there's a legal right for anyone to get connected. If you make an application for a grid connection, you must be made an offer.

The question is who gets connected first and when that connection will be made. Originally, that was done on a, and for many, many years, that was done on a first come, first served basis. That being the simplest way to try and manage the rights between the relevant or between the different parties.

However, this resulted in projects which are not ready to be built, delaying projects that were.

and changing the system became necessary. One of the reasons why we've got such delay is that all, even although this was obvious, it was a long time before action was taken. And that action has now been taken.

But in doing so, it's caused a further delay, primarily because it's just not possible to turn around a tanker quickly. So the whole system has been changed. You both need to be ready and you also need to be needed on the system in order to get a connection. There's been a massive process in doing that.

It is near, or we are beginning to see the light at the end of the tunnel in this process and these delays will come to an end and projects will get their connections and will be able to connect in the next few years.

But it has taken some time.

The planning system is an interesting one. For wind, because you need to get a, undertake bird studies, it takes a long time to get a planning permission. But actually for solar and batteries, it's relatively easy to navigate the planning system.

00:16:23 David Lee, podcast host

Okay, thank you.

So I'll resist in asking you whether it's quicker to turn around a renewably powered tanker than an oil tanker, but that definitely came to mind when you talked about that.

So we're seeing some positivity in terms of contracts for difference and the latest rounds bringing significant gigawattage in.

We're seeing some progress in grid connections while still, you know, not out of the woods there. Planning, not such a big issue.

So against all that backdrop, coming back to you, Sarah Jane, where is investors' money going at the moment?

The Brodies report said 75% of respondents plan to invest in battery storage in the next 24 months.

And globally, it ranks as the number one sub-sector for planned investment.

So why is battery storage so much on the agenda at the moment, Sarah-Jane? Why is it growing so quickly? And how do you see it playing out in the long term?

00:17:20 Sarah-Jane McArthur, partner at Brodies LLP

So I think this takes us back to the first question that you asked me, which is the intermittency of renewables generation needs something to balance it.

We need more storage in order to make sure that we have power when we need it, not just when it's produced.

Batteries provide that low carbon solution to provide balance.

In terms of the economics, battery projects are quicker and easier to deploy than wind farms. And there's a range of revenue options available for them, usually stacked.

So you have arbitrage, basically buy the power cheap and sell it when it's high.

You have ancillary services. These are services provided to NISO or the National Energy System Operator to stabilize the grid.

And you have the capacity market, which is a stable fixed revenue stream that secures available capacity during winter peak periods. And as you said, there are loads of batteries being delivered right now.

The problem is that NISO say there's currently too many batteries in development and they're forecast out to 2035.

So we expect to see really strong build out in the short term.

Beyond that, it's a bit more difficult to predict. It depends on the speed of transition, the speed of electrification and the deployment of other solutions such as pump storage hydro and also demand side solutions.

So that's where people who are using the power modify their behaviour in order to use the power when it's produced rather than when they would otherwise want to.

So the question really will be whether a better system in the future might reduce the need for batteries or whether even more is going to be needed to support a more renewable system.

00:19:02 David Lee, podcast host

Okay, you just talked about pump storage there. Is that going to play a big part, do you think?

00:19:09 Sarah-Jane McArthur, partner at Brodies LLP

It's going to be part of the mix.

It remains to be seen how big a part of the mix it's going to be, but at the moment there are substantial projects and development across Scotland in particular, and government policy in terms of the long duration energy storage support mechanism will be trying to bring forward these projects in order to provide low carbon balancing for the grid.

00:19:37 David Lee, podcast host

Okay, thanks very much.

We've talked primarily so far about the UK and looked through a UK lens at this issue, but just going a little bit further afield, in terms of renewable energy investment, Keith, the Brodies report shows that Asia Pacific and Iberia are the highest for attractiveness for renewable energy investment with 47% of investors saying they find them attractive regions.

Why are those regions in particular attractive to investors, do you think?

00:20:09 Keith Patterson, partner at Brodies LLP

I mean, I think the first thing to say is that attractiveness of regions for investment in renewables tends to come and go a bit because it depends on 2 factors.

One is the degree of penetration of renewables on the power system.

If it's perceived to be low relative to technology development, then that market looks like an attractive market for investing in.

And the other element is policy supportive. Is it accommodating new development? Is the government of the day encouraging it?

And particularly with Iberia, it has come and gone a bit. But if you look at Spain and Portugal, they've got great wind and sun or solar resources and therefore they've got the potential to have a renewable system or an electricity system that relies more on renewables than systems further north.

Asia, I think, has another reason for being attractive, which is that economic growth in the area is relatively high and economic development always means a requirement for more energy. And currently, nearly most of the new energy demand in the world is met with electricity or met by electricity.

So disproportionately, you get more electricity development per economic development. In the context of Asia, you will see an attractiveness for investors because they can just see increasing demand year on year for quite a while yet.

00:21:53 David Lee, podcast host

Okay, thanks Keith. And Clare, you've waited very patiently and we come back to you with one of those really simple questions about geopolitical risk.

Obviously, we've seen so much geopolitical instability in recent years and specifically to the topic we're discussing today, how big a risk is this presented and how has it impacted very specifically on both conventional and renewable energy investment?

00:22:21 Clare Munro, partner at Brodies LLP

Yeah, thanks, David.

So geopolitical risk is obviously hugely impactful on all forms of investment, actually, because we know investors crave certainty and we seem to be living in a more and more uncertain world these days.

The report shows, for our respondents anyway, that geopolitical risk was actually the overriding concern for them. And that was actually at the head of a long list of concerns about investing outside of the UK. So I guess you have to look below that kind of just generic headline statement.

There's a lot of complexity, different regulatory systems, different appetites, as Keith said, you know, different build out in various countries.

So it's a really different picture depending on where you might want to invest and obviously whether you're looking at conventional energy or renewable energy.

And Keith has just talked about investors showing confidence in Iberia and Asia, but obviously for renewable energy these days there's a lot less confidence in North America, for example, given the attitude of the administration over there for that type of investment and now a lot more appetite for conventional energy investment. So it's very uncertain. It's a really complex picture.

It depends where you are in the world and what you want to invest in.

00:23:43 David Lee, podcast host

Okay, thanks very much, Clare.

And as Clare said there, Sarah Jane, geopolitical risk identified in the report as the biggest risk factor.

What about the other risk to investment? What did the report find about the challenges of access to funding, competition and issues like that?

00:24:05 Sarah-Jane McArthur, partner at Brodies LLP

Thanks, David.

I think first thing to say is it isn't a capital problem. There are plenty of funds available in the market. And actually, in some respects, that's part of the problem, because there's increased competition, particularly in M&A and investment deals, intense competition between bidders for the best projects.

In terms of access to those funds, it's more of a risk problem. The investors need long-term policy support and they want to take investment risk that's commensurate with the return that they might be able to make.

Long-term infrastructure investors will accept lower returns but need a different risk profile to do that.

And as Keith alluded to earlier in talking about the investment point, construction risk is particularly challenging.

So we are seeing more platform and portfolio financing rather than single projects to try and spread that risk and reduce cost and time and bring other investors into the marketplace.

00:25:01 David Lee, podcast host

Okay, thanks very much.

And Clare, let's talk a little bit now about the continued role of conventional energy in that future mix.

What the report said, 37% of respondents continue to maintain exposure to conventional energy assets. Can you summarise why that is and why investment in gas and liquefied natural gas infrastructure in particular is still so attractive to investors?

00:25:30 Clare Munro, partner at Brodies LLP

Yes, so we're saying 37% are continuing to invest or considering investing. But on the flip side of that, means that 63% are not. So basically, you've got about 1/3 of UK energy investors are looking at including conventionals.

And then when you break that down even further, most of those investing, they're looking at gas infrastructure, so pipelines or liquefied natural gas, LNG as we call it, so bringing LNG from abroad to the UK.

So very little of this investment is in oil and gas exploration in the UKCS.

So you look further into what we found of our respondents, so only 15% of those 37% are actually looking at conventional oil and gas exploration investment in the UK. That's less than 5% overall. And I think, for us, that's very concerning. It's concerning for the energy transition as a whole.

Because as we've talked about before, the very nature of a transition is you're trying to move from one thing to another.

And as the report highlights, and that's something the UK oil and gas industry has been saying for a really long time, if you bring that sector in the UK prematurely to an end, you just lose the opportunity to have that kind of just and managed and seamless transition from one to the other.

I think we're really very much at risk of that with the policies in place at the moment.

And in terms of the second part of the question, why gas and LNG infrastructure remains attractive to investors?

Well, we still need it.

We all know now about intermittency and gas plays a big part and our gas infrastructure plays a big part in balancing that out.

00:27:17 David Lee, podcast host

Okay, thank you.

And just moving on from there, Keith. Clare there talked about, the importance of conventional energy in the transition.

What about specifically how those conventional energy revenue streams are actually helping to underpin the transition to low carbon? How is that playing out?

00:27:37 Keith Patterson, partner at Brodies LLP

I mean, I mean, as Clare was mentioning, I mean, this is a transition. And demand, energy demand is energy demand.

It is not affected by the transition. Transition doesn't influence demand. And that demand must be met. And it will be met partly by renewables.

But renewables cannot meet all of that demand and won't be able to meet all of that demand for a long time. And it will only be able to increase the amount of supply incrementally, just a few points each year.

So demand for conventional energy will be vital.

Looking more specifically at how conventional energy supports renewables, Sarah Jane talked about it earlier when we were talking about the fact that electricity can't be stored and therefore we need to be able to provide power at moments when renewables doesn't, because renewables is variable output, depends on the wind blowing or the sun shining.

And if you think about the point in time when the power demand is at its greatest in the UK, that is after dark, just after dark in December and January. So there's no solar, and that's just wind, a few other sources potentially of renewables, but mainly wind.

Oddly enough, experience tells us that it's usually windy somewhere in the UK. So a lot of the time, renewables plus batteries can meet a lot of UK demand, potentially.

But there will still be times when it is calm and cold, and therefore you need a supply of electricity.

00:29:31 David Lee, podcast host

Okay, thanks very much.

And in the light of what you've said and Keith said, Clare, and the policy positions that you've both touched on, how would you summarise that broad approach of investors towards conventional energy projects in the UK sort of now and looking ahead?

00:29:47 Clare Munro, partner at Brodies LLP

Yes, so I think when we talk about the conventional energy investment, we need to break it down just a little bit further.

So I mentioned, you know, upstream, UK oil, CS, oil and gas exploration, development, extraction.

So at the moment, it's a very challenging environment for the sector in the UK, and there isn't a lot of investment appetite for that at all.

As I mentioned in our respondents, less than 5% were considering investing in that, which is concerning.

In terms of what we would call midstream – so that kind of pipeline infrastructure, terminals, for both gas and oil, LNG receiving terminals – they are more attractive to investors because as we've mentioned a few times, we continue to need that hydrocarbon infrastructure to balance the intermittency of whatever we can produce with renewable energy.

So that is of more interest to investors currently.

So it's a slightly different picture really, depending on what exactly which part of the conventional energy investment area you're looking at.

But upstream is a pretty bleak outlook, I would say, and midstream a little less so.

00:31:03 David Lee, podcast host

Okay, thank you, Clare. So we're going to kind of start coming towards a conclusion and look at what needs to happen to address some of those investment issues that the report raises.

And for older viewers, a bit like A Question of Sport is the what happens next round.

So Keith, coming to you first of all, what do we need put in place generally to help that transition move smoothly and ensure that we see investment continuing to flow?

00:31:34 Keith Patterson, partner at Brodies LLP

Starting from the point of view of renewables. As I mentioned right at the start, the transition is really in two parts.

The first part is decarbonising electricity supply, making renewables the backbone of electricity supply, and then electrifying heat and transport.

Policy is currently in place really for electricity. The transition of the power system is well underway and has been for a number of years. And the policy instruments, many of them are in place. The most recent policy addition is long duration storage. So as the renewables penetrate and become more prevalent on the electricity system, the market supported the deployment of batteries.

So short duration batteries, one, two hour batteries, there was clearly a need within the market for those batteries to balance electricity supply from renewables.

But that wasn't the case or isn't the case for long duration storage. So that's being put in place. That will support the pump storage hydro that Sarah-Jane was talking about. And that's one part of the picture.

We've also got a lot of framework legislation in place for helping the transition for or electrification of heat and transport.

But that is a much harder task because the costs involved in doing so are potentially very high and really they probably require greater technological development before they can get deployed.

So in that sense, the framework, the legislation frameworks in place, but more is required in terms of policy implementation and also technological development before those can be deployed at scale.

00:33:38 David Lee, podcast host

Okay, and Sarah-Jane, why are grid consents, which we've talked about earlier on, and grid reform, sorry, and faster consents so important to supporting investment and supporting the energy transition?

00:33:54 Sarah-Jane McArthur, partner at Brodies LLP

So, as Keith has alluded to already, we've made excellent progress in decarbonising electricity, but

decarbonising heat and transport is going to need way more electricity and it's going to need to get to where it's needed.

So we need more electricity generation, we need more storage and we need more grids.

There's a really strong pipeline of projects but those grids and consenting issues are causing delay and bottlenecks and just wasting time and cost.

So in terms of what we've done, Keith already mentioned the connection reform process, and that process is almost complete.

It's been challenging, particularly for those who haven't secured a place in the new queue, but in terms of immediate impacts, we're seeing a real bounce in investments as projects secure connection dates and get built out.

That pent up demand is starting to fall.

Longer term, the ambition is that a more strategically aligned queue will enable quicker build out.

and build out of the right projects.

But those benefits might take some time to be realised and felt.

And then more broadly, strategic planning is required so that we can take a much more systems-based approach and we end up with the right projects in the right places to deliver affordable, low-carbon energy and security of supply that we're going to need.

00:35:22 David Lee, podcast host

Okay, thanks very much.

And Keith, again, coming towards wrapping up now, fiscal clarity and stable policy, we've talked about that quite a bit already, but why is it so essential to maintain those investment flows across the whole of the energy sector?

00:35:38 Keith Patterson, partner at Brodies LLP

So any investor or corporate making an investment decision is taking a whole range of factors into account. But two of those are always policy and tax.

And if they move, then that increases the risk of the investment.

If they are at risk of moving, if they see it as being unstable, then it increased the risks of investment. And if you increase the risks of investment, you increase the rates of return that are demanded by investors in order to make that investment.

So while I think we are on the path to the energy transition. Everybody can see it. Even when you look at the US administration and their current policies, you still see renewables being deployed in the States. It's slowing the transition. It's not stopping it. So you'll still continue to see investment.

The importance of fiscal clarity and stable policy is about the speed of it and the cost of it. Particularly with fiscal clarity – although Clare, I'm sure, will have a comment on oil and gas viewpoint on this – it's not so much about the risk of tax on profits as tax on production, because those will have a much bigger impact on the bottom line.

For investors, if there is fiscal clarity and stable policy, it makes the investment decision so much that much easier and long term reduces the cost of investment and long term, therefore, reduces the cost of energy to all consumers, whether in homes or in businesses.

00:37:31 David Lee, podcast host

Thanks very much, Keith. And we've discussed a lot of things today, Clare.

There's a lot in this report. What's your final message on the back of the publication of this report?

00:37:41 Clare Munro, partner at Brodies LLP

Yeah, so just a couple of final thoughts from me, I think.

Firstly, I think what this brings out very strongly and we've talked about today is that we've just got to stop talking about conventional versus renewable, you know, and pitching them against each other and thinking it's an ‘either or’ – it's not an ‘either or’.

Conventional energy actually supports our transition, obviously, and the labour skills the engineering expertise, the supply chain that we've built up in the UK over the years to support our oil and gas industry can actually also support our transition to renewables.

So, you know, to make the most of our transition and to do it in the best way, we should really be supporting our oil and gas sector. So that's the first thing.

And I guess the second thing is that what we've seen from our research is that there isn't, there's no lack of investment appetite for energy transition investment.

We just need to make the most of that and to ensure that we do make the most of that and maximize that as Keith just talked about. And we just need real fiscal and regulatory stability in the UK.

00:38:56 David Lee, podcast host

Thank you very much indeed to Clare Munro and to Keith Patterson and Sarah-Jane MacArthur for your excellent insights today.

This was an episode in a podcast series called Investing in the Energy Transition based on Brodies 2026 report on the subject. And if you'd like a copy of that report, please just search Brodies Energy Transition and you'll be able to find it and get one.

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