Growers warn soaring energy charges could hit UK food production
Farmers are bracing for soaring energy costs as new electricity charges come into force, prompting urgent warnings over the future of UK food production.
The NFU said growers face a “double whammy” of rising costs, with increases to Transmission Network Use of System charges — fees linked to maintaining the electricity network — set to begin in April.
In some cases, these charges are expected to double, with large glasshouse operators facing increases of more than £1 million a year.
The changes could add hundreds of millions of pounds to the farming sector overall, adding further strain on energy-intensive businesses already dealing with volatile markets.
The warning raises fresh concerns over the resilience of UK food production at a time of growing reliance on imports.
The increases come against a backdrop of rising energy and fuel prices, partly driven by the ongoing conflict in Iran. This is adding further pressure to sectors such as horticulture, which rely heavily on consistent and affordable energy.
The union has repeatedly raised concerns with ministers, arguing the changes could significantly damage domestic production if left unaddressed.
Martin Emmett, chair of the NFU Horticulture and Potatoes Board, said the sector is facing serious risks.
“The NFU has been clear that looming standing charge increases will seriously harm UK production, especially with energy and fuel costs already rising due to the conflict in Iran,” he said.
He warned that a lack of government support could lead to a repeat of recent supply issues. “Despite repeated evidence and warnings, government has not committed to supporting energy intensive horticulture, meaning growers will face the full impact, risking a repeat of the 2022/23 production cuts which in part resulted in empty supermarket shelves.”
Emmett also questioned how the policy aligns with wider ambitions for the sector. “Government has reaffirmed its intention to work with industry on a horticulture growth plan… yet this policy will actively undermine growth,” he said.
While acknowledging ongoing discussions with Defra, he added: “We appreciate Defra working with us on mitigations, but time is running out. Government must act now.”
The dispute highlights growing tensions between energy policy and the government’s ambitions to boost domestic food production.
The NFU has stepped up its campaign in recent weeks, writing to industry minister Chris McDonald and holding meetings with ministers to outline the potential impact on national food supply.
The union argues that parts of the farming sector, particularly horticulture, should qualify as energy-intensive industries and be eligible for support schemes such as the Network Charging Compensation Scheme.
It is also calling for reforms to how electricity charges are calculated, including basing standing charges on annual averages rather than peak demand, adjusting banding structures to better reflect usage, and removing standing charges from fixed contracts.
In addition, the NFU is pushing for greater support for renewable energy and changes to industry classification codes to better reflect different farming sectors.
The issue has also been raised with energy regulator Ofgem, with calls to update the Targeted Charging Review to ensure a fairer distribution of costs.
The government has previously said it is working with industry on mitigation measures, but no firm support package has yet been confirmed.
As the new charges loom, industry leaders warn the increases could force some growers out of production and deepen pressure on the UK’s domestic food supply.
