The UK construction industry is navigating its way through the energy transition as it shifts towards a more sustainable, lower carbon future, which presents particular risks and opportunities for the industry.

The regulatory framework for the construction industry is fast evolving, responding to the UK government’s climate change targets, and construction organisations will require to comply with new and stringent regulations on construction practices and materials for use in construction projects.

There will be increasing cost pressures for businesses as sustainable construction methods and the transition to them often involve higher upfront costs and can be more expensive to implement than more traditional methods.

There may also be a need for specialised skills and training, driving up labour costs. These could have a disproportionately high impact on smaller organisations and companies operating on tighter margins.

In addition to the cost pressures, sourcing sustainable materials and technologies may be challenging, particularly if demand outstrips supply of satisfactory products. This could lead to potential delays and further costs, impacting project timelines and exposing projects to supply chain disruption.

New technologies to support the switch to more sustainable approaches on project delivery in the industry can of course offer potential benefits, but the rapidly-paced technology development processes can bring challenges in integration and alignment with existing processes. The fast-moving nature of technological advancement also means that today’s cutting-edge solutions could become obsolete quickly, potentially reducing the appetite for investment.

As demonstrated by some of the recent and most extreme fluctuations in energy pricing, policy changes and international trade dynamics can create turmoil in the global energy market. The energy transition is influenced by global economic and political factors, and construction organisations must be agile and resilient to navigate that market volatility.

The energy transition can present construction companies with abundant opportunities. Driven by regulatory requirements and the desire of consumers to participate in efforts to reduce climate change risk, there is a growing demand for sustainable buildings, buildings that are energy-efficient, low cost and environmentally friendly - organisations that can deliver green construction, regardless of their size, stand to benefit.

Advances in areas such as the integration of renewable energy, energy storage solutions addressing security of supply and intermittency issues, and smart building systems, offer new opportunities for the industry. By adopting these technologies, construction companies can enhance efficiency, reduce costs, and improve project outcomes.

To keep up with the pace of transition and meet all the requirements, companies need a workforce that is able to operate at a level consistent with what is needed for sustainable construction delivery. Investing in training and development of workers will help them stay ahead of regulatory requirements and technological advancements.

Companies should consider collaboration with other stakeholders, including suppliers, technology providers and government agencies. Forming partnerships with other industry players can also facilitate access to new markets and resources.

Considering investment in research and development to explore new materials, technologies, and processes that can improve sustainability and efficiency will support staying ahead of competitors, as will staying abreast of market trends and critical regulatory developments.