A leading economist says the only way to fix the energy grid is to return it to public ownership.

Professor John Quiggin says the National Electricity Market has failed, and governments should buy back electricity transmission networks.

He said public ownership would stabilise both costs and supplies.

“The starting point for fixing things is a proper, publicly owned national grid,” Professor Quiggin said.

He said the electricity network “as a whole [has failed] to deliver the kind of outcomes that have been promised for the last 25 years or so”.

The economist has issued a discussion paper (available here in PDF form) about re-nationalising the grid.

He argues that the privatised system has forced governments to endure the economic and political costs of electricity failures, while the money goes to private hands.

He said South Australian blackouts, power loss at the Portland aluminium smelter, and the failure of the Basslink cable were examples where the true owners felt very little fallout.

“The problem is greatly exacerbated by disputes between the distributors in Tasmania, the owners of Basslink — largely the Singapore Government — and then failure to regulate and handle the whole business properly,” Professor Quiggin said.

“Simply it's very clear that what we're seeing is that the investment planning isn't taking place correctly and that the system of regulation isn't working correctly.”

He says public ownership is the only way to guarantee results.

“These are assets which were paying their own way for the best part of 100 years before we privatised them,” he said.

“Of course in telecommunications we've had to go back to a publicly-owned national broadband network because of the failure of privatisation again to deliver the goods.”