Foreign investment projects in the UK’s energy sector fell last year to the lowest number for 13 years as investors took stock amid geopolitical tensions and rising costs.
Scotland remained the UK’s leading destination for energy investment, securing 15 projects. This was more than half (55%) of the UK total of 27 which fell from 55 in 2024.
This was lowest annual total since 2013 (14 projects) and followed a 42% fall between 2023 and 2024.
A similar decline has occurred across Europe. According to the EY 2026 UK Attractiveness Survey, France remained the most favoured location with 50 projects, despite this being a fall of nearly a third (32%) from 74 projects. The UK’s 27 was second ahead of Germany with 16 and fourth place Spain with 12.
Oil and gas projects in the UK fell 81% year-on-year (from 16 in 2024 to three in 2025), while utility supply projects dropped 39% (from 39 to 24). The three oil and gas projects represent 15.8% of market share across Europe.
Despite the decline, EY says there are reasons for optimism, with a perception amongst investors that the UK has many of the credentials and skills needed to become a leading destination for energy transition investment.
When asked about the UK’s barriers to investment, the high cost of energy emerged as a recurring theme. The cost of doing business, including energy costs, is among the UK’s most significant perceived disadvantages, with 29% of investors citing cost as the third-biggest risk over the next three years, after macroeconomic conditions (41%) and geopolitical tension (33%).
More than a fifth (22%) of investors said the UK should concentrate efforts on reducing energy prices to maintain competitiveness in the global economy, marginally ahead of the 20% who said reduce and simplify taxation.
Scotland’s Energy Minister Stephen Gethins said: “These results, showing that Scotland secured more projects than Spain, and more than half of the UK’s national total, demonstrate that Scotland’s energy sector is one of the true leaders of the energy transition with the ability to attract serious and sustained inward investment in the face of global economic uncertainties.
“However, this report also illustrates the true cost of UK energy policy for cities like Aberdeen. Crucially, none of the challenges identified are insurmountable but many of the key policy levers remained reserved to Westminster.
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