UK’s Clean Energy Goals at Risk as Oil Jobs Cut and Renewable Projects Stall

The UK's clean-energy transition is under growing trouble as top oil majors cut jobs and big renewable energy projects stall over high financial risk and regulatory slowness. Despite strong commitments to achieve net-zero emissions, recent reports expose fault lines within the system, ranging from losses of jobs in traditional industries to delayed investment in clean energy.

The transition to renewable energy from fossil fuels has started, but not without difficulty. One of the strongest indications that change was coming came when Aberdeen heard that Harbour Energy, one of Britain's biggest oil and gas producers, had announced 250 onshore job cuts. The reason given for shifting investment elsewhere in countries such as Egypt and Argentina was high tax and a shut-off licensing system.

Meanwhile, Harbour Energy is reportedly considering withdrawing from carbon capture and storage projects like the Viking scheme in Humberside and the Acorn scheme in north-east Scotland due to repeated delays by governments. The firm's decision reflects a deeper issue—oil and gas worker transition arrangements are not great, with many suggesting that there aren't sufficient re-skilling prospects to switch to the renewable sector.

In the meantime, the renewable energy industry is also facing pressure. Ørsted, a Danish company, canceled its Hornsea 4 offshore wind farm despite it securing a 15-year price guarantee under the Contract for Difference regime. The firm said that the project is no longer profitable and is paying penalties to terminate supplier contracts.

This was preceded by another shock from Drax, suspending its £500 million proposal to install pumped storage hydroelectric capacity at Ben Cruachan in Scotland. The company attributed this to the cost of capital and uncertainty over future price support assurances. Pumped storage supports wind and solar power stabilization, and so this loss will be keenly felt in the future stability of a green grid.

The UK government's ambitious 2030 goal to provide 95% of energy from clean sources becomes more and more remote. Promises like these and cancellation send progress slowly and communicate the wrong message to potential investors. Large renewable schemes will remain stuck in limbo without strong incentives and clear regulation.

This uncertainty environment is compelling a reconsideration of the regulations of energy markets. A significant review is ongoing—REMA (Review of Energy Market Arrangements)—to have the possibility to shift from national to zonal pricing. The case is that the zonal pricing would reduce prices in zones such as northern Scotland, which has plenty of wind power. Critics, on the other hand, caution that it might cause higher overall prices, volatile prices, and deterrence of investment through regional imbalances.

At the same time, the UK's transmission charging scheme (TNUoS) comes under the limelight. The scheme overcharges Scottish power producers despite the nation having immense wind energy resources. To put it in perspective, one Scottish wind farm in the north is charged £5.54 for a megawatt hour to join the grid, while a Welsh wind farm is subsidized to the tune of £2.81. Such skewed charge influences optimum development of renewable regions and once again puts Ofgem in a challenge to come up with a new model.

The state-funded National Wealth Fund has responded to this announcement by investing £600 million in grid infrastructure, courtesy of Scottish Power. This pays for subsea connections between England and Scotland required to carry renewable power. These are nonetheless strongly opposed at a local level, however, which contributes to the difficulty of implementation.

The cost of overhauling Britain's electricity network has been estimated at £60 billion. The work must be done if the nation is to hit its net-zero ambitions and continue with energy affordability and reliability.

Unless these system problems are overcome, there would be severe consequences. Clean energy ambitions could not be fulfilled, redundancies in the conventional energy industry could increase, and the UK could stay dependent on imported fossil fuels. Energy bills could also increase through ongoing mayhem on international gas markets and feeding in more expensive prices into the transition.

The way of the UK to clean energy lies between waning fossil fuel corporations and an unsure renewable industry. Amid oil sector redundancies, delayed proposals for clean energy, and ageing grid cost framework, the trajectory towards net-zero hangs precariously in balance. What ministers do over the next several months—to decide the market designs, the charging systems, and how investments will be backed by promises—is set to shape the United Kingdom's destination for whether to get nearer or even more detached from climate aspirations.

Source/Credits: BBC Scotland Business and Economy, Douglas Fraser, 2025