Action needed as rising energy costs threaten farming businesses
27th October 2025
NFU has warned that rising energy costs and higher standing charges on business electricity bills are putting major pressure on the supply chain. Without action, these increases could threaten the survival of many farming businesses.
In a letter to Ofgem, energy regulator for Great Britain, the NFU has raised concerns about the way the current system bases standing charges (the non-variable part of the bill) on a business’s peak energy use, so seasonal users, such as farms running grain dryers or growers using refrigeration for only part of the year, end up paying high charges all year round. It calls for Ofgem to introduce a fair and more equitable distribution of costs for seasonal high-energy users.
NFU members seeking support to help them understand and manage their energy costs can receive tailored advice and support during this challenging period from NFU Energy.
NFU president Tom Bradshaw said that rising energy costs and the impact of increased standing charges are adding huge inflationary pressures in the supply chain.
Farmers concerned about their businesses
He added: “We’re hearing from many concerned farmers and growers that this is threatening their businesses, and in some cases, pushing them to the brink of closure.
“Production costs are high across the economy and have been for some time. But there’s a fairer way to approach the current standing charge model, one that would allow businesses to reinvest, improving efficiency and resilience.”
Mr Bradshaw said that Ofgem has already recognised that a more enduring and strategic approach to standing charges and affordability is needed.
“We agree. That’s why we’re calling on Ofgem to introduce a new High Capacity Usage, Low Utilisation scheme, a fairer system that would reduce capacity charges for occasional high-power users,” the NFU president concluded.
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