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State-owned electricity generation firm ‘could save Britons nearly £21bn a year’

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A publicly owned electricity generation firm could save Britons nearly £21bn a year, according to new analysis that bolsters Labour’s case to launch a national energy company if the party gains power.Thinktank Common Wealth has calculated that the cost of generating electricity to power homes and businesses could be reduced by £20.8bn or £252 per household a year under state ownership, according to a report seen by the Guardian.The Labour leader, Keir Starmer, has committed to creating “a publicly owned national champion in clean energy” named Great British Energy.Starmer is yet to lay out the exact structure of the mooted company, although he has said it would not involve nationalising existing assets, or become involved in the transmission or retail supply of energy.Starmer instead hopes to create a state-backed entity that would invest in clean energy – wind, solar, tidal, nuclear and other emerging technologies – creating jobs and ensuring windfalls from the growth in low carbon power feed back to the government.The Common Wealth report, which analysed scenarios for reforming the electricity market, said that a huge saving on electricity costs could be made by buying out assets such as wind, solar and biomass generators on older contracts and running them on a non-profit basis.

Funding the measure could require a government bond issuance, or some form of compulsory purchase process.Last year the government attempted to get companies operating low carbon generators, including nuclear power plants, on older contracts to switch to contracts for difference (CfD), allowing any outsized profits to flow back to taxpayers.

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