UK food producers are warning that a sharp rise in electricity standing charges from 1 April 2026 could force them to raise prices or cut output, sending costs rippling through supermarket shelves. Thanet Earth, one of Britain’s largest greenhouse growers, estimates the change will add £900,000 to its annual energy bill this year alone, with that figure projected to reach £1.6 million by 2028. The alarm comes as Ofgem’s new network price controls take effect at the same time, raising questions about whether the regulatory push to upgrade energy infrastructure is on a collision course with food affordability.
Standing Charges Set to Spike From April
The cost pressure traces back to how electricity bills are structured. Standing charges are the fixed daily fees customers pay regardless of how much power they actually use. They cover network maintenance, metering, and supplier obligations. Ofgem’s current approach to the domestic price cap sets both standing charges and unit rates for households each quarter, with the most recent adjustment covering January through March 2026. But the real shock for energy-intensive businesses arrives on 1 April, when a new round of increases tied to network revenues kicks in and filters through commercial tariffs.
For households, a few extra pence per day on a standing charge might barely register. For large-scale food producers running heated greenhouses around the clock, the same percentage increase translates into six- and seven-figure annual cost jumps. That gap between domestic inconvenience and commercial crisis is where the current tension sits. Producers who cannot pass costs on to retailers face a binary choice: absorb the hit or grow less food, with both options ultimately narrowing the availability of affordable British-grown produce.
Thanet Earth Sounds the Alarm
Rob James, the technical director at Thanet Earth, put it bluntly: “It’s a ticking timebomb.” The Kent-based operation, which according to recent coverage of its operations supplies most of the UK’s large supermarkets, grows tomatoes, peppers and cucumbers in vast glasshouses that depend on consistent heating and lighting. James warned that the incoming standing charge increases will add roughly £900,000 per year to the company’s energy costs, a figure he expects to balloon to £1.6 million annually by 2028 as network charges escalate over the coming regulatory period.
To put that in perspective, the projected 2028 increase alone would represent approximately 5% of Thanet Earth’s tomato production costs, according to reporting on the company’s internal estimates. That is not a rounding error. It is the kind of margin pressure that forces producers to either renegotiate contracts with supermarkets or reduce the volume of food they grow. Thanet Earth has recently filed full accounts made up to 25 April 2025 with the official companies register, giving lenders, retailers and policymakers a clearer financial baseline against which these projected increases can be measured and stress-tested.
Why RIIO-3 Is Driving the Increase
The standing charge hike is not arbitrary. It is tied to a regulatory framework called RIIO-3, Ofgem’s price control mechanism for monopoly energy networks. RIIO-2 ends on 31 March 2026, and draft determinations for RIIO-3 set out how allowed revenues and investment budgets will change for electricity transmission, gas distribution and gas transmission companies from 1 April 2026. These are the firms that own and maintain the high-voltage lines and gas pipelines. When their allowed revenues go up to fund more investment, the cost is recovered through the bills that every connected customer pays, including horticultural businesses.
The logic behind RIIO-3 is straightforward: Britain’s energy grid needs significant investment to handle the transition to net zero, connect new renewable generation and replace ageing infrastructure. Those upgrades cost money, and the regulator has determined that network companies need higher revenues to deliver them. The problem is that a large share of the cost lands on standing charges, which are fixed regardless of consumption. A greenhouse that has invested heavily in efficiency still pays the same daily network fee as one that has not. For producers already operating on thin margins, the structure of the charge matters as much as the total amount because it limits the benefit of cutting usage.
The Supermarket Squeeze
Thanet Earth’s position in the supply chain makes the stakes especially clear. The company supplies most of the UK’s major supermarket chains, meaning any cost increase or production cut at its facilities has a direct path to consumer prices. If Thanet Earth negotiates higher prices with retailers to cover its larger standing charges, those retailers will likely pass at least some of that increase to shoppers. If the company instead reduces output, the supply of domestically grown tomatoes shrinks, and retailers turn to imports that carry their own cost, currency and transport risks.
Neither outcome is good for consumers already dealing with food price pressures that have persisted since the energy crisis of 2022. The standing charge increase effectively creates a new floor under production costs that cannot be offset by using less electricity. A producer can invest in insulation, LED lighting or heat pumps to reduce exposure to unit rates, but the fixed daily charge stays the same. That structure removes one of the few levers growers have to manage their bills. It also complicates long-term contracts between growers and supermarkets, as both sides must now factor in a rising, non-negotiable cost element that sits outside normal efficiency gains.
Protected Horticulture Faces Outsized Risk
The protected horticulture sector, which grows crops in greenhouses and polytunnels rather than open fields, is uniquely exposed to standing charge increases. These operations typically maintain multiple high-capacity electricity connections to power heating, ventilation, CO₂ enrichment and supplemental lighting systems. Each connection carries its own standing charge. A single large greenhouse complex can have dozens of meters, and the fixed daily cost on each one adds up fast, particularly when multiplied across multiple sites serving national supermarket contracts.
Open-field farming, by contrast, tends to use far less grid electricity and relies more heavily on diesel and seasonal labour costs. The standing charge increase therefore hits protected horticulture harder per unit of food produced than almost any other agricultural subsector. That matters because protected horticulture is also the part of UK farming best positioned to reduce import dependence for salad crops, soft fruits and vegetables. If rising fixed charges push growers out of production, the UK becomes more reliant on imports from continental Europe and north Africa, increasing exposure to climate shocks abroad and to volatile transport costs.
A Regulatory Tradeoff With No Easy Fix
The tension at the heart of this story is a genuine policy conflict. Ofgem’s mandate includes both protecting consumers from excessive charges and ensuring that network companies can invest enough to keep the lights on and support decarbonisation. RIIO-3 is the mechanism through which the regulator balances those goals, but the balance looks different depending on who is paying. For a domestic customer using a modest amount of electricity, the standing charge increase may add a few pounds per quarter. For a commercial grower running a 24-hour operation across multiple sites, the same regulatory decision can threaten the viability of the business and the resilience of domestic food supply.
There is no publicly available breakdown from Ofgem showing how RIIO-3 revenue allowances will specifically affect standing charges for food production businesses. The regulator’s consultations focus on sector-wide revenue and investment frameworks, leaving individual industries to interpret the downstream impact. That gap in transparency makes it harder for producers to plan and harder for policymakers to assess whether the tradeoff between grid investment and food affordability is being struck in the right place. It has also prompted calls from industry groups for more targeted relief or for reforms that shift a greater share of network costs back onto unit rates rather than fixed daily fees.
What Comes Next for Food Prices
The April deadline is now weeks away, and producers like Thanet Earth are already factoring the higher costs into their planning cycles for planting and harvesting. The £900,000 annual increase that James cited is the immediate hit. The projected £1.6 million figure by 2028 assumes standing charges continue to rise as RIIO-3 investment ramps up over its control period. If those projections hold, the cumulative effect on UK-grown produce prices could be significant, particularly for crops like tomatoes and cucumbers where domestic production is concentrated among a small number of large operators with little room to absorb fixed-cost shocks.
For shoppers, the practical consequence is that the price of British-grown salad vegetables and greenhouse crops is likely to rise, or the products may increasingly be replaced by imports. Neither path reduces the cost of a weekly grocery shop. The standing charge increase is a fixed cost that cannot be avoided by using less power, and it arrives on top of other pressures such as labour shortages and higher borrowing costs. As the debate over how to balance energy investment with living costs intensifies, readers following this issue through weekly print editions and digital analysis will be watching closely to see whether ministers or regulators move to cushion the blow for key food producers.
The broader conversation also touches on how journalism, civic engagement and labour markets respond to intertwined crises in energy and food. Readers who want to track how these policies evolve can stay updated by maintaining a free online news profile, while those who value in-depth reporting on the impact of standing charges on households and businesses can contribute through the organisation’s reader support platform. The same pressures reshaping food production are also influencing the kinds of roles being advertised across the media and sustainability sectors, a trend visible on specialist boards such as environment and policy job listings, where employers increasingly seek expertise at the intersection of energy regulation, agriculture and consumer affordability.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
