One local community in Scotland has seen its economic fortunes collapse as the UK pushes for net zero, GB News has been told.
The City of Aberdeen is inextricably linked with the offshore energy industry in the North Sea.
The Continental Shelf Act 1964 paved the way for North Sea exploration, but it wasn’t until 1975 that Aberdeen became a hub for commercial oil production.
Profits soared through the 80’s and Aberdeen became the gateway to Britain’s black gold reserves.
Being the gateway to the North Sea’s riches, the granite city’s housing market peaked during the last oil boom in 2014.
Just ten years ago, Aberdeen’s market growth outpaced London and it was the second most expensive city to live in, due to the disposable wealth of the offshore workers calling it home.
But decline in the oil and gas sector over that decade, punctuated by the global pandemic and a rise in green energy initiatives, has resulted in property firms Zoople and Right Move calling Aberdeen the cheapest city to live in Britain.
Sequential rent caps and rising inflation have pushed by to let landlords to the brink across Scotland, but Aberdeen uniquely suffers from an exodus of workers.
Sequential rent caps and rising inflation have pushed by to let landlords to the brink across Scotland, but Aberdeen uniquely suffers from an exodus of workers.
Vince Spangenberg, CEO of Aberdonian estate agent Pebble Mountain Properties, recalls one client who followed through on advice to invest in property while he studied at Aberdeen University.
“He decided to buy a property because he says he was always told it was a good investment,” says Spangenberg.
“He’d bought a two-bedroom property close to the University for £115,000 in 2010.
“After he graduated, he then moved to Edinburgh, where he needed to buy a new house because of his work and decided to sell the property in Aberdeen last year, in 2023.
“After two independent surveys, the highest valuation he was able to get was for £75,000.”
Spangenberg says his client losing 35 per cent is not uncommon in recent years: “We’ve actually had similar stories of people in negative equity having to sell their homes because they just couldn’t afford the mortgage at the end of their fixed rate mortgage.
“There are things happening at the moment which aren’t exactly helping the situation for visitors either.
“People have always liked coming to Aberdeen because Aberdeen is a great city – a vibrant city – but we’ve had issues with the introduction of the low emission zone, bus gates introduced by the local authority and that has even made things difficult for people visiting the city.”
Paradoxically, while net zero initiatives spell tough times for the inner city, the shore is looking to green energy to capitalise on the next energy revolution.
The Port of Aberdeen has recently completed a £420million redevelopment of its south port, permitting all but the largest cruise ships to berth.
This is particular import, when considering the weight shouldered by vessels and rigs transporting wind turbine components and installation equipment bound for North sea wind farms.
The 900-year-old port is the longest continuously operating business in the United Kingdom and the busiest docks in Scotland, berthing 7,000 ships every year – 43 per cent of all shipping traffic in Scottish ports.
Port CEO Bob Sanguinetti, says the time has come for Aberdeen to look forward, not back.
“We’re now on a journey, on a path of energy transition,” explains Sanguinetti.
“One of the reasons for building the new harbour was to be able to accommodate the bigger and deeper ships that will be constructing and servicing the offshore wind farms of the future.”
Sanguinetti believes Aberdeen is “extremely well placed” to make use of skills, expertise and supply chains consolidated over the last 50 years.
He says: “The Port of Aberdeen is within 100 miles of 70 per cent of the wind turbines being deployed over the next 10-15 years.”
Back on dry land, the port has also broken ground in reducing emissions with its new ‘Shore Power in Operation” project, tasked with supplying clean power to up to 20 per cent of vessels moored in its north port.
In spite of Aberdeen’s recent ill fortunes, the port boss says: “there’s a buzz around the place that reflects the enthusiasm for the industry to continue playing a leading role in the energy sector as we go from fossil fuels into renewables.”
Moored vessels running diesel engines make up 90 per cent of the port’s emissions and the hope is to gradually move towards a position of net zero over the next 16 years.
Labour’s landslide election victory came with a pledge to grant no new oil and gas licenses, severing any doubt that Aberdeen would need to double down on its leaner, greener future.
Green energy is unlikely to be anywhere near as profitable as oil and gas at bringing international investment to Aberdeen, but there is a feeling that the die has been cast and the resolve of a city ready to make lemonade.
But if ever there was a city to stake its future on capitalising on its natural resources, few would bet against Aberdeen.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
