While there are multiple reasons to be optimistic in 2026 about the North-East of Scotland as the nation’s ‘Green Energy Powerhouse’, there is a need for some cold and stark realism.
So stated, Maggie McGinlay, the chief executive officer of ETZ Ltd, at The Business dealmakers’ breakfast in Aberdeen, during the opening panel which included GB Energy’s CEO Dan McGrail, and former BP Vice President of Projects, and CEO of Rockall, Gerry McGurk.
“While the offshore wind opportunity is vast, and we’ve seen progress with the AR7 [Auction Round] round, it has been four years since the ScotWind bidders were announced, and we’ve not seen one gram of steel in the North Sea, let alone a project connected to the National Grid,” said McGinlay.
Much of this, she admitted, is for understandable reasons related to geopolitical uncertainty, escalating costs, investment uncertainty, and policy hold-ups, but meantime the population of the North-East of Scotland is suffering.
“No-one in this room will be ignorant of the significant job losses that we are witnessing now in this region. It is hugely challenging and despairing in equal measures to see this happening. We are eroding the very supply chain, capability and talent, that the energy sector in the UK has been built on.”
FEARS FOR FURTHER SUPPLY CHAIN JOB LOSSES
“In fact, the biggest risk to achieving Scotland and the UK’s clean energy goals is losing our existing highly valuable industry and skills base. This must not be allowed to happen.”
She also urged that the harmful polarisation between the traditional oil and gas industry and the renewables sector must be halted. She quoted GB Energy’s chairman Jurgen Maier who said: “Oil and gas is our foundation: this isn’t about oil and gas or renewables. It is about oil and gas, and, renewables.”
“I couldn’t agree more. My biggest frustration right now is that energy policy has become so politicised. We have both renewables and oil and gas, and they are being stigmatised by one quarter or another.”
“Very few countries are blessed with an abundance of hydro carbons and renewables. Let’s embrace them both and ensure the former is an enabler for the later. It’s not a competition. The prize on offer is so vast, we have to get this right.”
CONFIDENCE IN A BETTER FUTURE
Earlier, she spoke about how Scotland must build on the region’s energy excellence, knowledge and know-how, and a global reputation which has been built-up over the last 50 to 60 years on the back of the oil and gas industry.
“I speak about optimism but also about realism, which are both sides of the same coin.”
She stated it was fantastic to have GB Energy headquartered in Aberdeen. It was revealed that a deal for the head office building in central Aberdeen is about to be signed.
“We are seeing the project pipeline and for the ScotWind and INTOG leasing rounds this is real potential of £96.1bn in offshore wind investment, if this can be realised. Scotland and the North-East in particular, there is huge opportunity around floating wind which makes best use of our world-class subsea and offshore engineering excellence.”
GREAT NEWS ABOUT AR7 ROUND
“It’s great to see the investment that GB Energy has made in the Pentland project, which was successful in the AR7 round. This, as well as Berwick Bank, proceeding in Scottish waters.”
McGinlay’s other reasons to be optimistic in 2026 are the potential of carbon capture and storage with the potential of £17bn, the employment of over 10,000 people in the construction, and a further 4,000 operational jobs, while hydrogen projects have a potential of £7bn by 2030. The Kintore hydrogen project is underway, via the Aberdeen Hydrogen Hub.
She also mentioned the work of decommissioning many of the assets in the North Sea, including oil rigs, platforms and connecting pipework.
“Right now, for the supply chain, probably one of the biggest opportunities, valued potentially at $44bn, and around £27bn by 2032.”
The North-East’s well-hub advancement makes up around 50 per cent of this and is vital to the engineering expertise of the region. But companies and contractors need reliable projects now.
“I’ve every confidence that we will get there, but it is hard for supply chain companies to diversify if these opportunities don’t yet exist. We see no lack of ambition from the supply chain companies in the North-East of Scotland, but they need these projects to be real and to be moving forward.”
She said one issue which requires a speedy resolution is OfGem, the regulator, and the UK Government over the escalating charges for the transmission of electricity, which is a disincentive for companies in the North of Scotland. She said projects, such as the West of Orkney windfarm, cannot move ahead when there is uncertainty over transmission charges. Costs for Scottish projects are anticipated to be around 30 per cent higher than the rest of the UK.
“It is imperative that this is addressed as we move into AR8 because the CDFs (contracts for difference) for AR8 when the INTOG projects will be brought forward for investment.”
Several contributors from the floor agreed that the Transmission Charging Regime needs to be urgently fixed.
Dan McGrail said that while the Pentland and Berwick Bank projects, both in Scottish waters, were given approval in the AR7 round, all of the projects in English and Welsh waters should not be ignored by Scottish-based supply chain and contractors.
“There will be business. I’m certain that every single wind farm in this country that has already been built has relied in some way, shape or form, on skills and knowledge that have been drawn from this region and from Scotland.”
He cited Danish company, Orsted, who have not built any Scottish wind farms, had shown him a supply chain map at their Norfolk site, and this included many supply chain firms from Scotland. Scotland, he said, with its knowledge of deep-sea oil and gas infrastructure and know-how has a unique opportunity for offshore and floating wind.
OVERWHELMING SUPPORT FOR OIL AND GAS
She also referred to an independent ETZ survey with True North Advisors, by Diffley Partnership, which asked 3,000 people from Scotland’s communities on their views on the energy transition. It showed that while there was ‘considerable enthusiasm and positivity’ about the electricity upgrade, there were almost 22 per cent who felt negative about the prospects. Broadly, a majority of 55 per cent think the switch to renewables is the right thing to do, double the proportion, 28 per cent, who think the opposite.
There remains massive support for the oil and gas sector with 73 per cent agreeing about its economic importance, saying it makes a positive impact on the UK economy, while just 7 per cent said it was negative. This was coupled with an overwhelming 87 per cent who said the UK should aim to meet more of its oil and gas from domestic production rather than through imports,
Maggie McGinlay also gave credit to both the Scottish Government and the UK Government for their support of ETZ Ltd to help ensure that “we are putting the foundations in place for the switch to low-carbon green energies.
On this point, the North-East of Scotland is soon to be given full status as an investment zone, she added: “This will be up and running and with that will bring ten years of £160m investment with flexible funding and low-tax status for two locations in Peterhead and the Aberdeen Energy Transition Zone. This will bring fiscal incentives to invest in the region.”
Read more on the Just Transition and Net Zero in our Energy section here.