The UK’s controlled environment horticulture sector is warning that a dramatic rise in electricity network standing charges threatens the viability of protected horticulture and related vertical farming operations.
Industry body UK Urban AgriTech (UKUAT) has highlighted plans for a planned 94 per cent increase in electricity network standing charges due to take effect in April 2026, saying the impact could be financially crippling for growers.
Under the current proposed system, charges are calculated on grid connection capacity rather than actual energy usage — meaning that larger energy-intensive facilities, including glasshouses and vertical farms with high capacity grid connections, could face significant additional costs regardless of how much power they actually consume.
“The near-doubling of standing charges is simply not absorbable,” said Dr Paul Myers, Managing Director of Farm Urban and a non-executive director of UKUAT. He warned that without urgent inclusion of horticulture in the Energy Intensive Industries exemption scheme, there is a real risk of undermining domestic food production.
Myers emphasised that the effects will extend beyond growers, pointing out that higher production costs are likely to feed through to consumers — compounding existing pressures from the cost-of-living crisis.
Industry representatives argue that the current exclusion of controlled environment agriculture from key energy relief schemes — often due to outdated industrial classification codes — further intensifies the sector’s financial vulnerability. Inclusion in schemes such as the Energy Intensive Industries exemption could offer relief comparable to other high-energy sectors.
The warnings come amid broader concerns that the UK’s horticulture energy costs are among the highest in Europe, placing domestic producers at a competitive disadvantage against counterparts in countries with lower industrial electricity prices and more supportive policy frameworks.
If unaddressed, the sector’s calls suggest potential consequences including reduced investment, business closures and a weakened domestic supply chain for year-round produce — just as demand for resilient, locally grown food is rising.
