Millions of households in the UK will miss out on savings of more than £4,400 over the next two years because of the lack of a nationalised energy company, a report claims. The country is currently in the throes of an unprecedented fossil fuel energy crisis, as staggering wholesale gas costs have been passed down to consumers in the form of record high energy bills. While Prime Minister Liz Truss has frozen energy bills for households at £2,500, the Trades Union Congress published a new report that found with nationalised energy, the Government could generate enough profits to slash bills for millions and roll out insulation schemes.
The Trade Union Congress has urged the Government to set up a “public energy champion” that would own low-carbon energy projects from wind and solar to tidal and nuclear power.
The body would be similar to EDF in France, EnBW in Germany, or Vattenfall in Sweden, which would harness the massive profits made by energy companies, and use them to lower bills for households.
According to its report, “the Government is missing out on £63billion – £122billion of direct income over the coming two years, due to past decisions to privatise our power plants and the resulting lack of UK public ownership of electricity generation.
“The revenues that the UK tax-payer is missing out on could have covered much of the cost of the UK government’s Energy Price Guarantee.”
Russia’s invasion of Ukraine sent wholesale gas prices spiralling and as a result, oil and gas producers in the UK, who sell their energy on the free market, have seen record profits.
Even though renewable energy is produced at significantly cheaper prices than natural, in the UK, the price of wholesale natural gas dictates the cost of electricity generation, which means that even renewable energy companies have had a bumper year.
So far, the Government has taken some steps to mitigate this crisis, as former Chancellor Rishi Sunak unveiled a temporary £5billion windfall tax on North Sea oil and gas companies.
Meanwhile, ministers are now trying to renegotiate the contracts of many older renewable generators, to convince them to sign onto a Contracts for Difference agreement, where they would sell electricity at fixed lower costs.
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Writing in the Guardian, Frances O’Grady, general secretary of the TUC claimed without shareholders extracting value, nationalised companies in Europe generated billions to reinvest in services, infrastructure and lowering bills.
She argued the public should get to “enjoy the full benefits” of energy generated in the UK, whether it is North Sea gas, or offshore wind power.
“Privatisation has led to higher bills and colder homes. We need a fairer, greener approach that stops energy companies using UK families like cash machines.
“French, Swedish and German families benefit from public ownership of electricity – why shouldn’t we? If we set up our own UK public energy champion, we can have lower bills, free home improvements to reduce our energy needs, and a safer climate for future generations.”
While TUC has argued that public ownership would help bring down prices, critics point at the French EDF, which has been laden with massive debt, forcing the french government to completely nationalise it.
Ms O’Grady added: “In the years ahead, the UK will need to build a tremendous amount of new clean energy infrastructure, to reduce our reliance on volatile fossil fuels and to keep the climate safe for future generations.
“The British public should get the full benefit of this UK-generated energy. Our report sets out proposals for the creation of a public energy champion to give the British people a major stake in our new energy infrastructure. And to make sure that the profits come back to the public purse – the UK’s public purse.”
It previously proposed the UK Government should nationalise the five biggest energy companies British Gas, E.ON, EDF, Scottish Power and Ovo, at a cost of £2.85billion
The TUC proposals were backed by the Green party, with their co-leader Adrian Ramsay saying: “It’s important there’s more government ownership across all parts of the energy market so that we can ensure a rapid transition from fossil fuels to renewables and secure our energy needs for the future.
“We do also need to support a diverse range of ownership models for energy generators and suppliers including local community, cooperatives and municipal that are close to the people they serve and can innovate.”