As the UK faces an energy crisis, a new think tank CommonWealth report suggests that a publicly owned electricity generation company could save the country nearly £21 billion per year.

If the UK Labour Party wins the election, the report strengthens its case for establishing a national energy company.

According to the report by CommonWealth, the cost of generating electricity for homes and enterprises in the United Kingdom could be reduced by £20.8 billion, or £252 per household per year, under state ownership. 

Keir Starmer, the leader of the Labour Party, has pledged to establish “Great British Energy,” a national company in clean energy that would invest in clean energy sources such as wind, solar, tidal, nuclear, and other emerging technologies, thereby creating jobs and ensuring that the government benefits from the growth of low-carbon power.

The organisation would not involve the nationalization of existing assets

Purchasing out assets such as wind, solar, and biomass generators on older contracts and operating them for a non-profit would result in significant electricity cost reductions. The measure’s funding may require issuing government bonds or some form of compulsory purchase.

CommonWealth observed that foreign national entities owned more than 40% of the United Kingdom’s offshore wind generation capacity, indicating that the benefits of high electricity prices caused by the conflict in Ukraine had shifted to other governments.

A publicly owned low-carbon energy generator would best achieve Britain’s climate objectives

The study determined that the publicly owned generator model would generate greater savings than other alternatives, such as a drive for voluntary Contracts for Difference (CFDs) and a division of the generation market between low-carbon and fossil fuel sources.

Director of Commonwealth Mathew Lawrence stated, “The energy system faces two acute challenges: astronomical profits made by generators and the urgent need to decarbonise generation.” He added, “A publicly owned generator can resolve these urgent issues and rebuild our energy infrastructure with the public’s best interests in mind. This is the quickest, most equitable, and most cost-effective method to build a clean, secure, affordable power grid.”

Opponents of energy nationalisation argue that it can stifle innovation and expose taxpayers to enormous financial risks, but the Common Wealth report suggests that a publicly owned generator model could be an effective instrument for decarbonising the UK. 

However, ambition comparable to establishing the National Health Service is required to make a significant difference. As the energy crisis in the United Kingdom shows no indications of abating, this proposal could be a game-changer for the nation.