El Niño, energy and food - why businesses need to think differently about power
For most UK businesses, the idea that a weather pattern forming thousands of miles away in the Pacific could influence their costs, supply chains or day‑to‑day operations might sound far‑fetched. Yet El Niño is a reminder of just how tightly woven our global systems have become, and how events in one corner of the world can quietly ripple through energy markets, agriculture and food production in ways that eventually land on a balance sheet here.
El Niño conditions have strengthened through 2026, and forecasters suggest this could be one of the more pronounced events in recent years. Although its direct impact on British weather is notoriously difficult to pin down, its influence stretches far beyond the Pacific, shaping rainfall, temperatures, crop yields and energy demand across multiple continents. For businesses involved in agriculture, food production, manufacturing or anything that relies heavily on refrigeration, those shifts matter more than they might expect.
Energy is becoming inseparable from the weather
Weather has always nudged energy demand up and down, but as electricity systems evolve, the connection is tightening. El Niño can bring drought to some regions and heavy rainfall to others. Less rain can reduce hydroelectric output, while altered weather patterns can affect wind generation. At the same time, extreme heat drives up electricity use for cooling, pushing demand higher just as supply becomes more unpredictable.
The International Energy Agency has already warned that a stronger El Niño could increase global electricity demand while reducing hydropower and wind generation in certain regions, creating greater reliance on gas and coal to fill the gap. That does not mean Britain is heading for shortages. The National Energy System Operator expects a secure electricity supply through winter 2026/27. The real issue for businesses is the potential for price swings and volatility.
Global weather shifts can increase demand for liquefied natural gas at the very moment countries are competing for limited supplies. The UK Government’s recent assessment of El Niño highlighted this as a pressure point for European energy markets, especially when layered on top of wider geopolitical uncertainty. For any business with high electricity use, the prospect of another period of unpredictable wholesale prices is far from welcome.
Food production feels the squeeze from both sides
The picture becomes even more interesting when you look at food production, where energy and raw materials collide. Food producers are often heavy electricity users. Refrigeration, cold storage, ventilation, irrigation, processing and packing all draw significant power. At the same time, the crops and ingredients they depend on can be directly affected by extreme weather.
Around half of the food eaten in the UK is imported, including much of our fruit and vegetables. Government analysis suggests El Niño could influence the production and price of commodities such as rice, wheat, coffee and cocoa, although the scale of any impact remains uncertain. UK agriculture is not immune either. Prolonged wet weather can delay planting and disrupt harvests, while poor grass growth can reduce silage production and create knock‑on pressures for livestock businesses.
This creates the possibility of pressure arriving from several directions at once. Raw materials become more expensive, supply chains grow less predictable and the energy required to process, refrigerate and store food becomes more costly too. It is a complicated mix, and one that businesses cannot simply wish away.
Where renewables start to make a difference
No business can control El Niño, international gas markets or global politics. What they can do is focus on the areas where they have more influence. Increasingly, that means looking at how much of their energy they can generate themselves.
Solar PV can reduce the amount of electricity a business needs to buy from the grid. Battery storage allows more of that energy to be held and used at the right moment, while also giving businesses more control over when they import electricity. For agricultural and food businesses, the options now stretch well beyond rooftop panels. Ground‑mounted systems, batteries and even floating solar can all play a part depending on the site, available space and energy profile.
The point is not that renewables eliminate every risk. They don’t. The point is that generating more energy on site reduces exposure to something businesses have almost no control over: the international energy market.
A more resilient way to think about energy
Renewable generation is accelerating worldwide. The International Energy Agency expects renewables to make up an ever‑larger share of global electricity, with solar PV now one of the biggest contributors to new supply. For businesses, however, the case for renewables is becoming about more than the broader energy transition. It is increasingly about resilience, stability and the ability to soften the impact of forces that sit far beyond the UK’s borders.
