3 min read
Last weekend’s cabinet reshuffle and specifically changes within DESNZ have renewed the debate about how the UK manages its energy transition. From our recent conversations with energy leaders, one theme stands out: the old binary of “oil & gas versus renewables” is not only outdated, it has also become a strategic liability.
Shared bottlenecks
The reason is simple. The same bottlenecks determine success for both worlds: resilient supply chains, skilled people, patient capital and long-term infrastructure. When supply chains shrink, when grid queues lengthen, or when skills pipelines falter, both hydrocarbons and renewables pay the price. Leaders now describe a single energy system, where fragility in one part undermines the whole.
Supply chains and skills
Take the supply chain. The sector is worried about losing fabrication capacity and vessels that serve offshore wind one week and oil & gas the next. Once those capabilities go, they rarely return. The Offshore Wind Industry Council warns that the UK has less than a third of the fabrication yard capacity needed to hit 2030 targets, a gap that will undermine hydrogen and CCS just as much as offshore wind.
The same is true of the workforce. Skilled engineers and technicians move across subsea, offshore wind, hydrogen and CCS. They see more value in creating pathways that allow rapid transfer between sectors than in guarding artificial boundaries. Research from Robert Gordon University has predicted up to 200,000 jobs able to shift sectors by 2030, but that promise will slip away soon if not acted upon now.
Capital and confidence
Capital markets are also reinforcing this convergence. Investors don’t price projects in silos; they price system-wide risk. Planning uncertainty, volatile policy signals and long connection queues affect the cost of capital across the board. The IEA calculates that higher interest rates add 20-30% to financing costs across the energy mix. That’s why many of the leaders we speak to now describe their advocacy in whole-system terms. They talk about security, investment and industrial strategy, rather than narrow technology carve-outs.
The convergence is even starting to show in policy debates. This week, Ecotricity’s founder Dale Vince proposed extending the use of CfD-style guaranteed pricing to support North Sea oil and gas producers and slow the withdrawal of operators over the next decade. Whether or not the idea proves viable, it highlights how far the debate has shifted: hydrocarbons and renewables are increasingly treated as part of one system rather than rival camps.
A test for ministers
This shift places a test in front of DESNZ incomers like Lord Vallance and Martin McCluskey. If ministers want to prove they can seize the moment, the real measure will be whether they can take a joined-up approach to supply chains, skills and infrastructure. Business is clear: ministerial rhetoric about growth only matters if it unlocks confidence for the companies that need to invest now.
What should businesses do?
The energy transition doesn’t work in neat categories. Neither should the engagement strategies of those who want to shape it.
At Aspect, our conversations with energy leaders show how fast the mindset is shifting - and how much influence depends on joining the dots across the whole system.
👉 Do you see the same blurring of lines between oil & gas and renewables? How is your organisation adapting its engagement strategy?
If you’d like to explore how Aspect can help you position your organisation in this new landscape, let’s talk.
