UK energy sector ‘poised for major growth’ in 2025

A turnaround in clean energy financing is set to propel the UK’s energy transition in 2025, an international law firm’s report has suggested.

Womble Bond Dickinson’s Global Energy Transition Outlook 2025 report paints a ‘markedly more positive outlook’ on the global push for cleaner energy, which it says will be bolstered by significant improvements in funding opportunities, political support and the game-changing possibilities of artificial intelligence (AI).

According to the report, 76 per cent of UK energy suppliers have launched new projects this year, driven by growing confidence in mergers, acquisitions and strategic alliances, as well as easier access to finance.

The findings also reveal 59 per cent of respondents have seen improvements in financial conditions, with 24 per cent noting ‘significant’ gains compared to last year. 

Richard Cockburn, head of Womble Bond Dickinson's UK energy sector, said: “Appetite for financing projects is now much more positive.

“Looking ahead, our outlook shows how UK energy producers and investors plan to broaden their energy mix, with solar, green hydrogen and heat networks topping the list for the coming years.”

The report – which showcases insights from more than 1300 energy professionals worldwide, including 500 UK energy suppliers, investors and major commercial energy users – also notes the growing role of AI in the energy sector, with 85 per cent of energy suppliers using it to enhance operational efficiency.

However, the UK continues to lag behind regions such as the US and the Middle East, with more than half (54 per cent) of UK producers and investors yet to adopt AI. 

Challenges such as cybersecurity, data management and a shortage of skilled workers are slowing progress, says the report, though 46 per cent of respondents plan to increase their AI investment in the coming years.

Richard added: “No one is arguing with the potential for AI to transform energy transition, but significant uptake requires planning and governance, particularly when it comes to training AI and compliance with regulations.

“Many are taking a wait-and-see approach, which is understandable given the need to avoid reputational damage and other serious consequences.”

On the consumer side, 61 per cent of commercial energy users are focusing on energy-saving initiatives to meet net-zero goals, driven by a mix of environmental concerns, operational efficiencies and financial benefits. 

This represents a shift in focus, with more than half (54 per cent) of major energy users now prioritising energy efficiency measures that were previously seen as too costly.

Richard added: “Three-in-five of the businesses we surveyed put this change in emphasis down to a strong focus on environmental protection.

“In addition, over a third highlighted the moral imperative of ‘doing the right thing’, while a similar proportion pointed to the operational efficiencies decarbonisation brings.

“All in all, this is an approach which allows firms to tick both ethical and financial boxes.”

To read the full report and gain further insights into how the UK energy sector is preparing for a more sustainable future, see here.

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