A Public Backbone, Competitive Market and Resilience Fund
Executive summary
Britain’s electricity system should be designed around a simple question:
Which parts genuinely benefit from competition, and which parts are essential infrastructure that must exist regardless of profitability?
Our electricity transformation does not propose nationalising the entire energy industry.
Instead, it creates a mixed system in which:
- electricity generation remains predominantly private and competitive;
- retail electricity suppliers remain private, operating within a regulated national tariff framework;
- electricity system operation remains public;
- electricity distribution and strategic network infrastructure progressively move to majority public ownership;
- strategic dispatchable reserve capacity operates through a public/hybrid model;
- a new Electricity Resilience Fund protects consumers against wholesale-price shocks, finances system resilience and progressively invests in electricity infrastructure;
- the public can directly invest through 5-year and 10-year Public Energy Bonds;
- returns from publicly owned electricity assets remain within the electricity system;
- once the Resilience Fund reaches its statutory maximum, surplus revenues automatically begin reducing consumers’ Network Access Charges.
This creates a system based on the principle:
Own what must exist. Compete what can compete. Contract what we occasionally need.
The transformation is designed to require relatively little conventional tax funding.
Where public money is used to acquire electricity infrastructure, it is not simply being spent. It is being exchanged for productive, income-generating assets.
The problem
Britain currently operates an unusual hybrid electricity system.
Many parts are privately owned, but government and regulators already determine much of the environment in which they operate.
Electricity distribution networks are regional monopolies. Consumers cannot choose which physical electricity network supplies their home.
Ofgem itself describes Britain’s energy networks as privately owned monopolies funded through consumer bills, with their allowable revenues controlled through the RIIO regulatory system. (Ofgem)
Great Britain’s distribution network consists of 14 regional DNO licence areas controlled by six corporate groups. (GOV.UK)
These businesses require enormous investment as Britain electrifies transport, heating and industry.
At the same time, Britain needs electricity generators to continue investing and competing.
It also needs generating capacity that may barely operate for much of the year but must be available during periods of exceptional demand, low renewable output or major system disruption.
Attempting to make every layer of this system behave as though it were an ordinary competitive market creates unnecessary complexity.
We propose separating the market according to the economic function each layer performs.
The proposed electricity system
| System layer | Ownership model | Role |
| Retail suppliers | Private | Customer service, billing, procurement, innovation |
| Standard tariffs | Regulated | National affordable electricity framework |
| Normal generation | Private | Competitive production of electricity |
| Wind and solar | Private | Competitive investment and generation |
| Commercial battery storage | Private | Arbitrage, balancing and flexibility |
| Nuclear | Hybrid where necessary | Strategic long-term generation |
| Distribution networks | 60% public / 40% private target | Essential regional infrastructure |
| Transmission infrastructure | Public / hybrid | Strategic national infrastructure |
| NESO/system operation | Public | Planning and operating the electricity system |
| Balancing market | Publicly operated, competitively supplied | Short-term system balancing |
| Strategic Dispatchable Reserve | Public / hybrid | Guaranteed firm capacity |
| Strategic fuel reserves | Public | National resilience |
| Long-duration strategic storage | Public / hybrid | Multi-hour/day resilience |
| Electricity Resilience Fund | Public, ring-fenced | Price stability, resilience and infrastructure investment |
Electricity generation remains competitive
There is no need for government to own every wind farm, solar farm, battery or generating station.
Where developers can build generation commercially, private investment should continue.
Private businesses should be able to:
- develop generating projects;
- raise capital;
- take construction risk;
- innovate;
- compete for contracts;
- earn reasonable profits;
- introduce new generating technologies.
Profit is not inherently a problem.
If a company builds useful generating capacity efficiently, takes commercial risk and produces electricity competitively, there is a legitimate role for a return on investment.
Government’s job should be to design a market that rewards useful electricity production without forcing consumers to underwrite excessive long-term profits.
Retail suppliers remain private
Retail electricity should also remain competitive.
Suppliers can compete through:
- customer service;
- billing;
- technology;
- smart-home systems;
- EV integration;
- battery management;
- demand response;
- procurement efficiency;
- business services.
However, basic household electricity should operate within our proposed national regulated tariff.
The objective is competition in service and efficiency, rather than encouraging hundreds of complicated tariff structures for an essential household service.
Electricity distribution becomes majority publicly owned
Electricity distribution is fundamentally different.
Consumers cannot select another set of cables.
Distribution therefore has the characteristics of a natural monopoly.
Ofgem regulates DNO revenues because these companies do not face ordinary competitive pressure. Its RIIO-ED2 price-control framework determines how much revenue distribution companies can recover and incorporates financing returns for network investors. (Ofgem)
Rather than immediately nationalising these businesses, Britain should gradually build a controlling public stake.
Ten-year ownership programme
Our target would be approximately:
| Year | Target public ownership |
| 1 | 5% |
| 2 | 10% |
| 3 | 15% |
| 4 | 20% |
| 5 | 27.5% |
| 6 | 35% |
| 7 | 42.5% |
| 8 | 50% |
| 9 | 55% |
| 10 | 60% |
The ultimate structure becomes:
60% public
40% private
This creates a genuine hybrid infrastructure model.
The public gains control and receives the majority of future shareholder returns.
Private investors remain involved and continue contributing capital and commercial scrutiny.
Government should buy intelligently — not compulsorily
The 60% objective should apply across the distribution system rather than forcing government to purchase precisely the same percentage of every network every year.
Government should be a patient infrastructure investor.
It should purchase stakes when:
- existing shareholders want to sell;
- valuations are reasonable;
- network companies require new equity;
- new infrastructure is being developed;
- government capital can reduce financing costs;
- acquisition represents good long-term value for electricity consumers.
If an owner demands an excessive premium, government should be able to wait.
This creates negotiating power and avoids an arbitrary deadline forcing taxpayers or consumers to overpay.
Public investment begins earning returns immediately
This is fundamental to the funding model.
Government does not spend billions purchasing electricity infrastructure and receive nothing in return.
It exchanges:
cash or financing
for:
ownership of an income-producing infrastructure asset.
Once the public owns 5%, it becomes entitled to its corresponding economic return.
At 20%, those returns increase.
At 40%, they increase again.
At 60%, the public becomes the controlling shareholder and receives the majority of shareholder returns.
Those returns remain within the electricity system.
This creates a compounding investment model:
Resilience Fund investment
↓
Electricity-network ownership
↓
Dividends and investment returns
↓
More capital available
↓
Additional public ownership
↓
Greater future public returns
This is how the transition begins to finance itself.
Public Energy Bonds
Not all infrastructure investment needs to come directly from the Resilience Fund.
Britain should establish Public Energy Bonds allowing individuals, pension funds and institutional investors to invest directly in Britain’s electricity infrastructure.
Two standard products could initially be offered:
5-Year Public Energy Bond
Designed for medium-term investors.
Capital would be committed for five years in exchange for a government-backed or infrastructure-backed fixed return.
10-Year Public Energy Bond
Provides longer-term capital suitable for infrastructure acquisition and development.
Investors accepting the longer commitment could receive an appropriately priced long-term return.
Exact interest rates should be set according to prevailing government borrowing costs and market conditions rather than permanently fixed in legislation.
What the bonds finance
Public Energy Bond proceeds could finance:
- DNO share acquisitions;
- transmission infrastructure;
- new public network investment;
- strategic storage;
- eligible strategic dispatchable assets;
- other revenue-producing electricity infrastructure.
Bond proceeds should not fund general government expenditure.
They should be ring-fenced.
Why Energy Bonds are different from taxation
Taxation transfers money to government to pay for public expenditure.
An Energy Bond is an investment.
The investor provides capital.
In return they receive:
- a contractual financial return;
- repayment of their capital at maturity.
Government then owns or finances an underlying productive asset.
The electricity infrastructure generates revenue that contributes towards servicing the investment.
This means the financing chain becomes:
Public investor
→ buys Energy Bond
→ Electricity Infrastructure Fund
→ acquires productive infrastructure
→ infrastructure produces revenue
→ revenue contributes towards bond interest and repayment.
The objective should be for electricity-system revenues, rather than general taxation, ultimately to service as much of the financing as possible.
The Electricity Resilience Fund
At the centre of the new electricity market sits the Electricity Resilience Fund.
The Fund has four purposes:
Price stability
Protect the regulated electricity tariff when wholesale electricity becomes unusually expensive.
Strategic resilience
Pay for electricity capacity Britain needs for security but which cannot necessarily survive through an ordinary energy-only market.
Infrastructure investment
Invest surplus capital in productive electricity infrastructure.
Consumer dividend
Return excessive accumulated surpluses to consumers through lower Network Access Charges.
How the Resilience Fund receives money
The Fund has several revenue sources.
A. Regulated tariff surplus
Our standard daytime electricity rate is targeted at:
15p/kWh
Suppliers receive:
wholesale electricity cost + regulated supplier margin.
Where the combined wholesale cost and supplier margin is below the regulated tariff, the remaining amount flows into the Resilience Fund.
For example:
Consumer rate: 15p
Wholesale electricity: 7p
Supplier margin: 2p
Remaining:
6p/kWh → Electricity Resilience Fund
The mechanism also operates in reverse.
If wholesale electricity becomes exceptionally expensive and the regulated tariff is temporarily insufficient, the Resilience Fund pays the difference.
This makes it an electricity-price stabilisation mechanism rather than simply another levy.
B. Progressive Network Access Charges
The standard Network Access Charge is proposed at:
Tier 1 — £25
Tier 2 — £50
Tier 3 — £100
The base network cost is recovered through the standard NAC.
Additional progressive payments contribute towards system resilience.
Using our proposed illustrative household distribution:
70% Tier 1
20% Tier 2
10% Tier 3
creates an additional stable source of resilience funding.
This is particularly valuable because, unlike wholesale-market revenue, it is relatively predictable.
C. Progressive peak electricity use
The domestic tariff also discourages exceptionally high peak electricity consumption.
Our proposed structure is:
0–250 kWh/month peak electricity
15p/kWh
250–500 kWh
30p/kWh
Above 500 kWh
60p/kWh
The standard 15p component remains part of normal electricity revenue.
The additional:
15p/kWh in Tier 2
and
45p/kWh in Tier 3
flows into system resilience.
Appropriate additional allowances would apply where objectively required, including electrically heated homes and specified medical electricity requirements.
The intention is not to penalise normal electricity use.
It is to discourage exceptionally high demand during the periods in which the electricity system is most constrained.
Historical stress testing
We have modelled the proposed mechanism against historical electricity conditions rather than assuming today’s wholesale prices continue indefinitely.
That is essential.
The electricity system must survive both inexpensive years and extraordinary energy crises.
Our initial modelling indicates that normal years can generate substantial Fund surpluses.
During an exceptional wholesale-price event comparable with 2022, the direction reverses and accumulated reserves protect consumers.
That is precisely what the Fund is designed to achieve:
Save during inexpensive years. Protect consumers during expensive years.
The system should therefore not promise that wholesale electricity will always remain below the regulated tariff.
It should instead be financially capable of surviving the periods when it does not.
The Strategic Dispatch-able Reserve
Britain requires electricity that can be dispatched when renewable generation and normal commercial markets cannot provide sufficient supply.
The Strategic Dispatchable Reserve must be technology-neutral.
It is not a gas subsidy.
NESO should specify the capability required.
For example:
Britain requires X GW capable of beginning generation within Y minutes and sustaining output for Z hours or days.
Technologies compete to provide that capability.
Potential technologies include:
- gas generation;
- hydrogen generation;
- pumped hydro;
- long-duration batteries;
- sustainable dispatchable bioenergy;
- appropriate nuclear flexibility;
- other proven dispatchable technologies;
- future technologies that meet reliability requirements.
NESO already operates reserve services intended to guarantee additional capacity for the control room when required, illustrating the existing need to procure availability as well as electricity production. (National Energy System Operator (NESO))
⸻
Different reserve products
Not all reserve capacity is equivalent.
Britain should procure several products.
Immediate reserve
Seconds to minutes.
Primarily system stability and frequency response.
Short-duration reserve
Minutes to hours.
Suitable for batteries, flexible generation and demand response.
Medium-duration reserve
Hours to days.
Designed for prolonged supply/demand imbalance.
Strategic prolonged reserve
Potentially multiple days during severe low-renewable conditions or major infrastructure failures.
A 2 GW battery capable of producing electricity for four hours cannot simply be counted as equivalent to 2 GW of generation capable of operating continuously for several days.
The system must measure both:
Power — GW
and:
Energy — GWh/TWh
NESO’s wider operability work already considers adequacy, flexibility, frequency, thermal constraints, voltage, stability and restoration as distinct system requirements. (National Energy System Operator (NESO))
Strategic reserve can be public or private
Government does not need to own every reserve generator.
There are two models.
Public reserve
Government owns assets specifically because Britain needs them for strategic resilience.
These assets do not need to earn ordinary commercial profits.
A generator that sits idle for much of the year may still be economically successful if it prevents a national electricity shortage when required.
Contracted private reserve
Private companies can compete for long-term availability contracts.
They receive payment for guaranteeing defined capacity.
Contracts specify requirements including:
- MW available;
- response time;
- duration;
- reliability;
- fuel availability;
- maintenance;
- testing;
- dispatch obligations.
The cheapest credible solution wins.
This retains competitive discipline while guaranteeing national resilience.
Strategic fuel
A dispatchable generator is only resilient if its energy source is available.
Britain therefore needs corresponding strategic energy reserves.
Initially this could include gas required specifically for emergency electricity generation.
As the system changes, it could include:
- hydrogen;
- stored electricity;
- other strategic fuels.
Reserve levels should be determined by NESO based upon the amount of electricity generation required during severe but credible scenarios.
The objective is not to maintain a particular fuel.
It is to maintain guaranteed electricity availability.
NESO remains publicly owned
Electricity-system operation should remain firmly public.
The UK government completed the acquisition of the Electricity System Operator from National Grid in October 2024, establishing the publicly owned National Energy System Operator.
The acquisition had an enterprise value of approximately £630 million. (GOV.UK)
There is an important lesson in that transaction.
Government acquired a strategic electricity-system asset, but the government stated that the majority of taxpayer costs would ultimately be recovered through existing electricity-system charges that had previously gone to National Grid. (GOV.UK)
Our wider programme applies a similar principle.
Public ownership need not mean permanent taxpayer subsidy.
NESO becomes the system architect
NESO should determine Britain’s future requirements for:
- generation adequacy;
- network capacity;
- strategic reserve;
- storage;
- interconnection;
- system stability;
- demand response;
- restoration capability;
- long-term resilience.
It should identify what the electricity system requires.
Competitive markets can then determine who can provide many of those services most efficiently.
NESO should not routinely own commercial generating assets because the organisation determining system requirements should remain independent from ordinary commercial generation interests.
The Resilience Fund has a statutory maximum
The Electricity Resilience Fund must not become an unlimited government savings account.
Its maximum balance should be determined from rigorous system modelling.
The calculation should include:
- repeat of a 2022-scale energy shock;
- prolonged elevated wholesale prices;
- Strategic Dispatchable Reserve commitments;
- strategic fuel stocks;
- extreme weather;
- major generator failures;
- interconnector disruption;
- transmission failures;
- minimum liquidity requirements.
Once those risks can be adequately covered, there is no justification for continuously taking additional money from consumers.
When the Fund is full, bills automatically fall
Once the statutory maximum is reached, the Network Access Charge begins to reduce.
A 10% reduction, for example, would produce:
| NAC | Standard | Reduced |
| Tier 1 | £25 | £22.50 |
| Tier 2 | £50 | £45.00 |
| Tier 3 | £100 | £90.00 |
Further persistent surpluses can produce further reductions.
If a subsequent crisis materially reduces the Fund, the NAC can gradually return towards its standard level.
This makes the Fund an automatic stabiliser.
Government does not decide each year whether consumers deserve some money back.
The rules determine it.
Protecting the Fund
The Resilience Fund should contain legally separated accounts.
Tariff Stabilisation Reserve
Pays for periods when the regulated consumer tariff is temporarily below underlying electricity procurement costs.
Strategic Resilience Reserve
Funds dispatchable capacity, strategic fuel and emergency electricity requirements.
Infrastructure Investment Account
Invests genuine surplus capital in DNO ownership, transmission and other productive electricity infrastructure.
Infrastructure acquisitions cannot be financed by emptying the reserves needed to protect electricity supply.
Only capital above the required resilience thresholds can be committed to long-term acquisitions.
Investment returns belong to electricity consumers
This principle should be written into legislation.
Assets purchased using electricity-system revenues belong economically to electricity consumers.
Returns should not disappear into general Treasury spending.
Income from public electricity investments should remain within the electricity system.
It can be used for:
- maintaining resilience;
- financing infrastructure;
- purchasing further public equity;
- servicing Public Energy Bonds;
- lowering consumer Network Access Charges.
This creates the compounding effect at the centre of the transition.
Funding the ten-year DNO transition
The transition can therefore draw capital from several sources.
Electricity Resilience Fund surpluses
Once statutory resilience requirements have been satisfied.
Returns from existing public network investments
Every acquisition progressively increases future public income.
Public Energy Bonds
Five- and ten-year investment products provide additional capital without requiring equivalent immediate taxation.
Government infrastructure borrowing
Used selectively when public financing is cheaper than the long-term private capital cost being replaced.
New infrastructure equity
Where a DNO needs additional capital for expansion, government can provide part of that investment in return for increased equity.
This can sometimes be preferable to buying existing shares.
Instead of paying an existing shareholder £1 billion:
£1 billion can finance £1 billion of new network investment
while increasing public ownership.
That simultaneously improves the grid and builds public equity.
This is investment, not simply expenditure
There is an important distinction between:
£5 billion spent paying an annual subsidy
and:
£5 billion invested in an electricity network worth £5 billion.
The first produces an immediate cost.
The second produces a public asset.
That asset may:
- appreciate;
- generate regulated revenues;
- pay dividends;
- support additional borrowing;
- provide essential infrastructure for decades.
Government debt may increase when an acquisition is financed.
That liability should be reported transparently.
But the public balance sheet simultaneously gains an asset.
Any serious assessment therefore needs to examine net public assets and future cash flows, rather than presenting the gross acquisition price as though the money simply disappears.
Why gradual acquisition matters
There is no reason to nationalise the DNOs overnight.
A ten-year programme provides several advantages.
It limits annual financing requirements.
It allows the Resilience Fund to accumulate capital.
Early investments begin producing returns before later acquisitions occur.
Government develops experience managing its shareholdings.
Private investment remains available throughout the transition.
Purchases can be delayed when valuations become excessive.
New network investment creates opportunities for public equity.
The programme therefore develops progressively rather than through a single enormous government transaction.
The snowball effect
The funding system ultimately looks like this:
Affordable regulated electricity
↓
Resilience Fund accumulates surpluses in normal years
↓
Fund protects consumers in abnormal years
↓
True surplus capital buys electricity infrastructure
↓
Public electricity assets generate investment returns
↓
Returns remain inside the electricity system
↓
Returns finance further ownership and resilience
↓
Public ownership approaches 60%
↓
More returns accrue to consumers
↓
Resilience Fund reaches maximum
↓
Network Access Charges fall
This is why relatively little conventional taxpayer funding should ultimately be required.
The system progressively finances its own transformation.
Strong governance is essential
Public ownership alone does not guarantee efficiency.
The publicly owned stake should therefore be managed commercially and at arm’s length from day-to-day political interference.
An independent electricity infrastructure holding company should manage public network investments.
Its statutory duties should include:
- maintaining infrastructure;
- delivering value for consumers;
- investing for long-term capacity requirements;
- maintaining prudent financial ratios;
- publishing investment returns;
- preventing excessive executive remuneration;
- reporting all related-party transactions;
- publishing annual asset valuations;
- returning profits to the electricity system.
Ministers should determine national policy.
NESO should determine system requirements.
Professional management should operate infrastructure companies.
Private shareholders retain protections
Moving towards 60% public ownership does not mean confiscating private assets.
Existing owners should receive fair market compensation where shares are acquired.
Government should acquire stakes through:
- negotiated purchases;
- market transactions;
- shareholder exits;
- capital raisings;
- new infrastructure investment;
- agreed corporate transactions.
Britain still needs enormous private investment in generation and electricity infrastructure.
The transition must therefore demonstrate that the UK remains a reliable place in which to invest.
The long-term structure
At the end of the transition Britain would have a deliberately mixed electricity economy.
Competitive private sector
Generation
Renewables
Commercial storage
Retail supply
Technology
Construction
Engineering
Demand-response services
Public infrastructure
NESO
Majority ownership of electricity distribution
Strategic transmission interests
Strategic energy reserves
Hybrid infrastructure
DNOs — approximately 60% public / 40% private
Strategic Dispatchable Reserve
Nuclear where appropriate
Long-duration strategic storage
Selected interconnectors
This recognises that no single ownership model is appropriate for every part of the electricity system.
What success looks like
The objective is not nationalisation.
The objective is not privatisation.
The objective is:
abundant, affordable and reliable electricity.
A successful electricity system should provide:
- predictable household electricity prices;
- competitive investment in generation;
- sufficient returns to attract productive private capital;
- publicly controlled monopoly infrastructure;
- guaranteed dispatchable reserve;
- protection against extraordinary wholesale shocks;
- long-term infrastructure investment;
- declining consumer charges once financial reserves are adequate.
The test for every future electricity policy should therefore be:
Does this make Britain’s electricity system cheaper, more resilient and better able to meet the country’s long-term energy requirements?
Funding principle
The central financial principle of this transformation is:
Do not use taxation to subsidise indefinitely what can instead be financed through productive public investment.
Britain already pays for electricity networks through electricity bills.
Those networks already generate revenues and returns for their owners.
Instead of asking consumers to pay for those assets forever while all shareholder returns leave the public system, Britain should progressively become a shareholder itself.
Each acquisition produces an asset.
Each asset produces a potential return.
Each return helps finance the next stage.
Public Energy Bonds provide additional voluntary investment capital.
The Electricity Resilience Fund provides financial stability.
Private capital continues funding competitive generation and a minority share of network infrastructure.
The result is not a conventional nationalised electricity industry.
It is a publicly anchored electricity market capable of progressively financing its own infrastructure and resilience.
Implementation
Years 1–2
Establish the Electricity Resilience Fund.
Legislate its statutory objectives, protected reserves and maximum balance.
Launch the regulated national electricity tariff.
Establish the public Electricity Infrastructure Holding Company.
Launch 5-year and 10-year Public Energy Bonds.
Begin initial DNO investments with a target of approximately 5–10% system-wide ownership.
Years 3–4
Increase public DNO ownership towards 20%.
Begin receiving and reinvesting infrastructure returns.
NESO establishes formal Strategic Dispatchable Reserve requirements.
Separate procurement into fast, short, medium and prolonged reserve products.
Establish strategic fuel requirements.
Years 5–6
Increase DNO ownership towards 35%.
Prioritise new public equity investment where networks require additional capital.
Expand strategic storage and dispatchable reserve.
Review Resilience Fund adequacy using actual operating experience.
Years 7–8
Increase public ownership towards 50%.
Review whether transmission ownership requires further public acquisition.
Increase the proportion of infrastructure investment financed by accumulated public returns.
Years 9–10
Reach approximately 60% public ownership of electricity distribution infrastructure.
Maintain approximately 40% private participation.
Review the long-term public/private structure.
If the Resilience Fund has reached its statutory maximum and all resilience obligations are funded, begin or accelerate automatic reductions in the Network Access Charge.
FAQ
Is this full nationalisation?
No.
Most generation remains privately owned.
Retail suppliers remain private.
Commercial storage remains private.
Construction, engineering and energy technology remain competitive private industries.
Public ownership is concentrated on essential monopoly infrastructure and national resilience.
Why 60% public ownership?
It gives the public controlling ownership and the majority of economic returns while retaining substantial private capital and commercial scrutiny.
It also avoids the cost and financing requirement of purchasing 100% of every DNO.
How much will taxpayers pay?
The objective is to minimise conventional tax funding.
The transition uses Resilience Fund surpluses, infrastructure investment returns, Public Energy Bonds, public infrastructure borrowing and investment in new DNO equity.
Exact taxpayer exposure cannot credibly be stated until detailed company-by-company acquisition valuations have been completed.
The important distinction is that acquisition expenditure purchases productive assets rather than funding recurring consumption.
Aren’t DNOs already regulated?
Yes.
That is part of the argument for public ownership.
Ofgem describes Britain’s network companies as privately owned monopolies funded through consumer bills and controls the revenues they can collect through price regulation. (Ofgem)
The proposal gradually changes who owns the regulated equity.
Will government confiscate shares?
No.
Acquisition would be gradual and appropriately compensated.
What happens if wholesale electricity becomes extremely expensive?
The Electricity Resilience Fund absorbs the difference between the regulated tariff and underlying procurement cost, subject to its statutory rules.
The Fund accumulates reserves during more favourable years precisely so that it can protect consumers during exceptional ones.
What happens if the Fund becomes too large?
Network Access Charges automatically begin falling.
The purpose of the Fund is resilience, not government revenue accumulation.
Are Public Energy Bonds compulsory?
No.
They are voluntary investments.
Investors choose whether to purchase a 5-year or 10-year bond in return for the applicable financial return.
Would Energy Bonds be risk-free?
Their precise legal structure would need to be determined.
If directly guaranteed by government they would carry government credit backing.
If issued by an infrastructure corporation without an unconditional government guarantee, their risk and return would be different.
This distinction must be explicit before bonds are offered.
Conclusion
Britain does not have to choose between a completely nationalised electricity industry and the existing privatised model.
There is a third option.
Private businesses compete where genuine markets exist.
The public owns the infrastructure where genuine competition does not exist.
Government and private investors jointly provide strategic capacity where society needs assets that may not generate sufficient ordinary commercial revenue.
And instead of repeatedly asking taxpayers to subsidise the consequences of a poorly structured electricity market, the electricity system begins accumulating assets and financial reserves of its own.
Over time:
consumers finance infrastructure → the public progressively owns that infrastructure → the infrastructure generates returns → those returns finance more infrastructure and resilience → excess returns ultimately reduce consumer charges.
That is the transformation:
A competitive electricity market built on a publicly owned backbone, protected by a funded national resilience system and designed to return the long-term value of essential infrastructure to the people who pay for it.
Supporting Documents
References
- Ofgem — Electricity distribution and RIIO price controls. Ofgem confirms that Great Britain’s energy networks operate as privately owned monopolies funded through consumer bills. (Ofgem)
- UK Government — Electricity Distribution Networks Study. Great Britain’s 14 regional monopoly DNO networks are controlled by six companies. (GOV.UK)
- Ofgem — RIIO-ED2 Final Determinations and finance framework. (Ofgem)
- UK Government — Acquisition of the Electricity System Operator and establishment of publicly owned NESO. (GOV.UK)
- NESO — Balancing Reserve and electricity-system operability. (National Energy System Operator (NESO))