The UK remained Europe's second-largest destination for energy-related foreign direct investment in 2025, but its position near the top of the rankings disguises a sharp fall in the number of projects coming to Britain.
Figures from the EY 2026 UK Attractiveness Survey show that the UK attracted 27 energy FDI projects during the year, down 51% from 55 in 2024 and the lowest annual total since 2013, when 14 projects were recorded. France remained Europe's leading destination with 50 projects, while Germany recorded 16 and Spain 12.
Britain therefore finds itself in an unusual position. It remains one of Europe's leading destinations for energy investment, yet the number of projects secured has more than halved in a year and has now fallen sharply for two consecutive years.
The latest decline follows a 42% reduction in UK energy FDI projects between 2023 and 2024, meaning the weakness in 2025 was not an isolated fall. The composition of investment has also changed, with oil and gas projects dropping from 16 in 2024 to just three in 2025, an 81% decline.
Utility supply, which includes renewable energy, transmission and storage, held up better but still recorded a sizeable fall. Projects declined from 39 to 24, or 39%, leaving utility supply responsible for 24 of the UK's 27 energy FDI projects last year — almost 89% of the total.
Those figures put the UK's second-place European ranking into a different perspective. Britain is still attracting more projects than most competing European economies, but considerably fewer investments are being recorded than in either of the previous two years.
Britain was part of a much wider decline in energy investment across Europe, where the number of FDI projects fell 36%, from 275 in 2024 to 177 in 2025.
France retained first place despite experiencing a 32% decline of its own, from 74 projects to 50. Germany's total fell from 34 to 16, a drop of 53%, while Spain recorded a similar 52% fall, from 25 projects to 12.
| Country | 2024 projects | 2025 projects | Change |
|---|---|---|---|
| France | 74 | 50 | -32% |
| UK | 55 | 27 | -51% |
| Germany | 34 | 16 | -53% |
| Spain | 25 | 12 | -52% |
Britain's decline was therefore considerably steeper than France's, although broadly in line with the falls experienced by Germany and Spain. More significantly, the UK's share of European energy FDI projects slipped from 20% to 15%, meaning Britain took a smaller share of what was already a substantially weaker European market.
The fall in project numbers sits somewhat awkwardly alongside EY's survey of international investors, which suggests Britain continues to be viewed favourably in several areas associated with the energy transition.
EY interviewed 360 international investment decision-makers, with 60% rating the UK positively for renewable provision in electricity supply and 53% giving the country a positive rating for green innovation. Utility supply, including CleanTech and renewables, was also identified as one of the sectors with the potential to drive future UK growth.
When investors were asked to choose the two sectors they expected to drive Britain's growth in the coming years, 15% selected utility supply. Software and IT services led the rankings at 29%, followed by financial services at 22% and business and professional services at 21%.
The contrast is one of the more interesting findings in EY's research. Investors continue to identify strengths in Britain's renewable energy and green innovation capabilities, but those positive perceptions did not translate into a stronger flow of energy FDI projects in 2025.
EY's survey also points to one of the obstacles facing the UK: the cost of doing business.
Some 29% of investors included business costs, including energy, among the three biggest risks to UK attractiveness over the next three years. That placed costs behind macroeconomic conditions, cited by 41%, and geopolitical tensions at 33%.
When investors were asked what Britain should focus on to remain competitive globally, 22% identified reducing energy prices, slightly more than the 20% who chose reducing and simplifying taxation.
Annie Graham, EY's UK Industrials and Energy Leader, argued that the significance of energy extends well beyond investment in power generation itself because it is also an important input for energy-intensive industries, including steel and AI data centres. She highlighted grid connection times, planning reform, domestic energy production and energy prices among the areas likely to influence future investment.
The survey does not establish that high energy costs caused the 51% decline in energy FDI projects, and the figures should not be interpreted that way. What it does show is that energy and wider business costs remain a significant concern among the international investors EY questioned.
The geographical breakdown is particularly striking. Scotland secured 15 of the UK's 27 energy FDI projects in 2025, or roughly 56% of the national total, with all three oil and gas projects located in Aberdeenshire. The West Midlands attracted five energy projects and London two.
Scotland's share becomes more significant when set against the wider FDI figures. Across every sector, Scotland secured 108 of the UK's 730 inward investment projects in 2025, equivalent to around 15% of the national total.
In other words, Scotland accounted for about 15% of all UK FDI projects but approximately 56% of its energy projects. The comparison does not say anything about the monetary value of those investments — EY's figures here measure project numbers — but it demonstrates just how geographically concentrated energy FDI was during the year.
The scale of the energy downturn also becomes clearer when it is compared with Britain's broader performance.
EY recorded 730 UK FDI projects across all sectors in 2025, down 14% from 853 a year earlier. Against that backdrop, the 51% decline in energy projects was more than three times as large in percentage terms.
Performance varied considerably between sectors. Britain remained Europe's leading destination for software and IT services, attracting 155 projects, while business and professional services accounted for 153. Financial services moved in the opposite direction to energy, with EY recording 85 projects in 2025, up 16% year on year.
The comparison suggests that the weakness in energy cannot simply be treated as another reflection of the overall decline in UK inward investment. FDI weakened nationally, but energy project numbers deteriorated much more sharply.
The United States and Norway were the leading sources of UK energy FDI in 2025, each accounting for four projects. Across Europe, there was also a change at the top of the rankings as the US overtook Germany as the leading origin of energy investment projects, ending a decade in which Germany had held that position each year.
Even then, US-origin investment was lower than a year earlier, falling from 25 projects in 2024 to 20 in 2025. France was the source of 17 European energy projects, followed by Germany with 16.
The answer depends on whether the focus is Britain's position relative to its European competitors or the direction of investment itself.
Measured by the number of energy FDI projects secured in 2025, the UK remains a major European destination and trails only France. Look beneath that ranking, however, and the picture is considerably weaker: projects fell from 55 to 27, Britain's European market share declined from 20% to 15%, oil and gas projects dropped 81%, and utility supply projects fell 39%.
There is a more encouraging side to the data. International investors surveyed by EY continue to rate aspects of Britain's renewable electricity provision and green innovation positively, while utility supply remains among the sectors identified as having future growth potential.
That leaves a clear gap between perceived opportunity and projects actually secured. Britain remains second in Europe, but it is second in a market that contracted sharply during 2025, and its own share of that market also declined.
For the UK, that is the more important message behind the ranking. Its position relative to European competitors remains strong, but maintaining second place will matter much less if the underlying flow of energy investment continues to shrink.
