April ‘26 Electricity Standing Change Hikes for Protected Horticulture: BTGA response
Press release
UK Protected Horticulture Sector Faces multi-million-pound annual energy cost surge: urgent government action needed to prevent higher costs to consumers and major risk to food industry resilience.
31st October 2025
The UK’s controlled environment horticulture sector is sounding the alarm over a devastating 94% increase in electricity network charges set to take effect in April 2026. Without immediate government cooperation, the financial shock could trigger widespread business failures and drive-up food prices for millions of consumers.
Part of the problem is the sector’s exclusion from the Energy Intensive Industries (EII) exemption scheme[i]—a policy oversight rooted in outdated Standard Industrial Classification (SIC) codes. Despite operating with energy demands comparable to compensated manufacturing sectors, protected horticulture remains ineligible for this support.
Inclusion of protected horticulture in the EII scheme would offer considerable relief, but even with a 90% discount, ongoing increases in energy costs across the board remains financially difficult for many businesses—threatening business viability and likely driving food price inflation at a time when affordability is critical.
UK energy costs are the highest in Europe and further increases risk making British horticulture uncompetitive compared to growers in countries like Holland and Belgium. The EII exemption was introduced to help offset this disadvantage, as UK industrial electricity prices remain significantly higher—£56/MWh versus £34–£38/MWh in France, Germany, and the Netherlands.i
Expected Financial Shock
For some large individual glasshouse businesses, the planned standing charge hike of 94% could add almost £1M[ii] to operating costs. Growers—who supply essential year-round crops like tomatoes, cucumbers, and peppers—operate on razor-thin margins and cannot absorb such a dramatic increase in costs.
“This is not just a business challenge; it’s an existential crisis,” said Simon Conway, Chair of the British Tomato Growers Association (BTGA). “After weathering the recent energy crisis, this non-commodity network charge increase, threatens the viability of glasshouse growers, unless they can pass the costs downstream, which in turn could drive further food inflation in 2026”
Energy Intensity Overlooked
The sector’s exclusion from EII relief stems from a technicality:
Horticulture SIC Code ineligibility: Current classification codes prevent growers from accessing the scheme, despite their clear eligibility based on energy consumption.
Protected horticulture ranks mid-table for energy use, on par with many industries already receiving the 90% relief[iii] via the EII exemption scheme.
Industry leaders are urging the Government to recognise the sector’s true energy profile – a precedent that was set when the protected horticulture sector was included in the Industrial Energy Transformation Fund for the first time in 2023[iv].
A Pillar of the UK Economy and Energy Grid
The value of home-produced Tomatoes, Cucumbers and Peppers is over £250m and supports over 3000 jobs. It also plays a vital role in national energy infrastructure:
Many sites use Combined Heat and Power (CHP) systems, acting as embedded generators exporting to the grid rather than net importers,
This local generation enhances grid resilience, reduces transmission losses, and supports the UK’s Net Zero goals.
Consequences for Consumers and the Economy
Without swift action, the wider economy will also be impacted:
An increase cost to food production means potentially impacting consumers, compounding existing struggles with the cost-of-living crisis
Unviable costs reduce competitiveness of UK grower businesses likely leading to business failures and reduced future investment in more production and innovation
Food resilience would be undermined - domestic growing capacity could reduce, increasing reliance on imports.
A Lifeline for Growers:
The BTGA and CPGA added: “We’re calling for a common-sense fix—at the very least update the eligibility rules to include CEA horticulture in the EII exemption scheme to reflect our energy-intensive reality. Even with support, energy costs continue to rise relentlessly, which places unprecedented pressure on growers. Without urgent action, UK food production is at risk and consumers will continue to feel the impact at the tills.”
[i]Energy Security Bill factsheet: Network charging compensation scheme for energy intensive industries (added 9 May 2023) - GOV.UK
[ii] From anonymised data collected from BTGA & CPGA members, October 2025
[iii] Proposed uplift to the Network Charging Compensation Scheme for energy intensive industries (EIIs): government consultation response - GOV.UK
[iv] Energy support announced for horticulture but poultry still under pressure – NFUonline