UK Urban AgriTech (UKUAT) has issued a warning over the impact of a planned 94% increase in electricity network standing charges scheduled to take effect in April 2026. According to the organization, the proposed changes pose a significant financial risk to the UK’s controlled environment agriculture (CEA) sector, including both protected horticulture and vertical farming operations.
The group adds that, ‘Although current data focuses on protected horticulture, Vertical Farms (VFs) face an equally severe threat. The planned charges are based on grid pull capacity rather than actual energy usage, meaning larger, energy-intensive VFs, including major operators, could shoulder enormous additional costs.’ They warn, ‘Even smaller vertical farms, which already operate on razor-thin margins, face existential challenges. These higher charges will also deter investment in new VFs, as reduced margins increase risk and weaken the business case for growth.’
Vertical farms, which often require high-capacity grid connection infrastructure for lighting and HVAC systems, face similarly unsustainable increases to large-scale greenhouse businesses. “For the Controlled Environment Agriculture sector including businesses like ours, a near-doubling of standing charges is simply not absorbable,” warns Dr Paul Myers, managing director at Farm Urban and a non-executive director of UKUAT.
“Without urgent inclusion of horticulture in the Energy Intensive Industries exemption scheme, we risk undermining domestic food production at the very moment it is most needed. Rising energy costs will push growers out of production and increase costs for consumers.”
He added that the impact will of these increased charges will extend far beyond growers, with higher production costs are likely to feed through to consumers, compounding existing pressures from the cost-of-living crisis. Unviable energy costs will reduce the competitiveness of UK growers, increasing the risk of business failures and discouraging future investment in production and innovation.
