Aberdeen’s Energy Transition: Struggles and Stakes in the Shift to Renewables

The city caught in the middle – For Iona Macdonald, the transition from the oil and gas industry to the renewable energy sector has been a bittersweet journey. After graduating from Aberdeen University in 2000 with a chemistry degree, she quickly found herself immersed in a sector that dominated the economic landscape. “I inevitably slid into the oil and gas industry,” she says, recalling her early days in the Granite City. At the time, the sector was flush with opportunities, offering high salaries and a sense of stability. “You would see a lot of Ferraris and Lamborghinis,” she reminisces, highlighting the lavish lifestyle that came with the profession.

The Dream of a “Just Transition” Falters

However, nearly a quarter of a century later, the industry she once relied on is facing a stark reality. Macdonald, now 48, was recently laid off after a career spanning both onshore and offshore roles as a production chemist and later a training manager. Despite her efforts to pivot into renewable energy, she’s found herself working at minimum wage in a Glasgow pub, a far cry from the lucrative position she once held. “It’s been quite the struggle to transition out of what’s a very heavily specialised technical industry,” she admits. This sentiment is shared by many former oil and gas workers, including her friends, who have seen their six-figure salaries replaced by supermarket shelf-stacking jobs.

“Our position is rooted in a plan for a just transition and a fair-minded analysis of what the science demands,” said UK Energy Secretary Ed Miliband in a speech on 21 April.

Miliband and other politicians have long championed the concept of a “just transition” as a cornerstone of energy policy. This vision aims to ensure that the move from fossil fuels to clean energy is not just environmental but also socially equitable. Yet, for Iona and others like her, the transition has felt anything but just. “I have friends who’ve gone from six-figure salaries to stacking shelves in a supermarket overnight,” she explains. The rhetoric of smooth and fair change contrasts sharply with the reality of job losses and uncertain futures for those displaced.

The Legacy of Aberdeen’s Oil Boom

Aberdeen’s history is deeply intertwined with the energy sector. From medieval trade with Scandinavia to the 19th and 20th-century herring industry, the city has long depended on the sea for prosperity. But it was the discovery of oil in 1969 that reshaped its identity. “The nightlife was very vibrant,” Macdonald recalls, painting a picture of a city that thrived on oil’s economic power. The industry brought not only wealth but also a booming standard of living, with wages, property prices, and social life all rising to unprecedented levels. Even during downturns, the city managed to sustain itself, earning a reputation as Europe’s oil capital.

North Sea oil production reached its peak in 1999, just as Macdonald began her career, hitting 4.5 million barrels of oil equivalent per day. Today, that figure has dwindled to over one million BOE in 2024, marking a significant decline. While the renewable energy sector has grown, its progress has not yet matched the scale of the oil industry’s collapse. Iona’s story is emblematic of a broader challenge: how to retrain and reemploy workers in a sector that is rapidly evolving.

The Financial Hurdles of Transition

The transition from oil and gas to renewables has not been without obstacles, particularly in the UK’s financial policies. Paul de Leeuw, director of the Energy Transition Institute at Robert Gordon University, notes that the workforce in the oil and gas sector has shrunk from about half a million to 115,000 in Scotland alone over the past decade. Meanwhile, only 39,000 renewable energy roles have been created in the same period. “Oil and gas is declining faster than many of us were expecting, but the renewables industry is simply not ready to take all the jobs,” de Leeuw says. This gap has left thousands of workers in limbo, struggling to find new pathways.

Fiscal instability has also played a role in slowing the transition. De Leeuw points to five tax changes in four years as a key factor that has dampened investor confidence. Many have shifted their capital to more stable markets, such as Norway, where the energy transition is more advanced. Industry leaders, meanwhile, are urging the Chancellor, Rachel Reeves, to implement a system where windfall taxes are only applied when oil prices exceed a certain threshold. This move, they argue, could incentivise investment in renewables while protecting the profits of remaining oil firms.

Scotland’s Crossroads: Opportunity or Crisis?

As the UK and Scotland navigate this energy shift, the question remains: are they managing the transition effectively? Aberdeen, once a symbol of oil prosperity, now stands at a crossroads. The city’s identity, built on decades of fossil fuel extraction, is being challenged by the rise of green energy. While the renewable sector has seen growth, particularly with “homegrown renewables” contributing over 50% of the UK’s electricity today, the pace of job creation has not kept up with the rate of layoffs. This has sparked concerns about the long-term economic impact on regions like Aberdeen, which have relied heavily on the industry for generations.

The debate extends beyond individual stories. For the UK as a whole, the success of the energy transition could determine its ability to meet climate goals while maintaining economic resilience. Iona’s experience underscores the human cost of this shift. “I’m conscious I’m not using any of my skills and experience,” she says, reflecting on the personal sacrifices involved. Yet, her story is not unique. Thousands of others face similar dilemmas, raising questions about whether the current approach is adequate.

Looking Ahead: A Path to Balance

With the North Sea’s production nearing its limits, the urgency for a sustainable energy model has never been greater. While the renewable sector is still in its early stages, it has the potential to redefine the UK’s energy landscape. However, achieving this requires more than just policy promises. It demands investment, retraining, and a strategic vision to support workers through the transition. For cities like Aberdeen, this means adapting to a new economic reality without abandoning the legacy of the past.

As the Holyrood election campaign highlights the “just transition” as a key issue, the challenge lies in translating rhetoric into action. The path forward will depend on how effectively the government and industry can address the skills gap, financial barriers, and regional disparities. Iona Macdonald’s journey from the oil rigs to the pub is a microcosm of this broader struggle. Her story serves as a reminder that while the energy transition is inevitable, ensuring it is equitable and sustainable requires more than just a change in fuel sources—it demands a change in mindset and policy.