The regulator Ofgem has today confirmed that it has increased its cap on energy prices meaning the average energy bill will rise by ten per cent from October. The news is a brutal reminder that the cost of living crisis is inseparable from and driven by our continued reliance on volatile global fossil fuel markets. In this context, rapid decarbonisation of the energy system — though undoubtedly an immense undertaking — is not just a moral imperative but an economic necessity. 

The energy crisis is, however, far deeper and more pervasive than even the acute pain of sharply rising utility bills. It is evident in the almost six million low-income households regularly going hungry or skipping meals. It is visible in the height of five-year olds falling since 2013 because of malnutrition. It can be felt in the tired bodies of the 61 per cent of workers who say they feel exhausted at the end of most working days. Because what are all these examples if not the failure of our society to provide everyone with the energy — the physical, calorific, and social resources — needed to live securely and well.

No society is free when a child goes hungry. No society is secure when people fear how they’ll get through the month. No society is dignified when people lack access to life’s essentials. But that is Britain today. A society whose social metabolism — how we organise the production, distribution and consumption of energy, the fuel of all life — is, for many people, in a state of chronic emergency.

A politics that has rightly made guaranteeing everyday security its lodestar cannot allow this emergency to endure without consequences. Insecurity will remain endemic — and therefore millions of lives unfree — so long as the energy crisis remains unresolved. Given its systemic significance, and the political salience of rising utility bills, if Labour want to rebuild a society of genuine security they need to deliver thoroughgoing reform of the electricity sector.

The UK has been subject to a radical experiment. More than almost anywhere else in the world, our electricity sector is fully privatised, highly fragmented, and consequently reliant on the price mechanism and profit imperative to coordinate the investment, divestment and operation of assets across power generation, transmission and distribution. What’s more, the pay-as-clear marginal pricing system governing wholesale energy markets — itself a necessity due to the marketised and privatised system — has consistently elevated bills above that imposed by real resource constraints alone.

The result of this market primacy: higher electricity prices than anywhere in the EU; energy infrastructure that is under-invested in and rent extracted from; and a renewables sprint that is stalling exactly as we need to accelerate. This is not a coincidence. Market coordination, premised on investment guided by the profit imperative, market-based governance, and concentrated private ownership, is structurally ill-equipped to deliver a fast, fair, cost-effective energy transition. 

An alternative institutional architecture is needed based on public ownership not only to rapidly build out a clean electricity system, but to also translate renewable power into cheaper bills. Direct public investment and coordination can deliver singular benefits of lower cost, greater certainty and systemic coherence, with investment decisions based on system-level needs not private profitability. Complementing public ownership of generation and transmission, a National Energy Guarantee can introduce a new energy billing structure to ensure every household has access to a free or cheap amount of energy to cover their essential needs.

The stakes are high. The political prize is clear. Abundant, affordable, clean power that keeps more money in people’s pockets and less in shareholder profits is a compelling material offer and moral mission. But failure to decarbonise power and lower bills will be weaponised by a growing and dangerous political constellation: the fusion of far right politics with a revanchist fossil capital bloc that aggressively targets the net zero agenda.

Defeating this politics requires a social metabolism that builds public power: democratic, decarbonised and decommodified. But an enduring resolution to our energy crisis requires more than delivering affordable electricity. It requires a more expansive politics of energy, one that ensures everyone has sufficient income to afford the essentials by reforming social security and rebalancing power at work. It requires a public investment strategy that builds the social and physical infrastructures we all need, not just the financial portfolios the asset manager giants want. It compels us to struggle for a society of genuine abundance, where everyone has enough to live freely and securely, but not through the exploitation of other people and places. And it must allow time and space for rest and leisure, of a world beyond work. 

The argument is not just about fairness, but functionality. The new government has argued that growth must substantially increase before we can invest at scale in the social and infrastructural foundations that underpin security. But that gets the relationship precisely the wrong way around. The strength of an economy rests on the health of its social settlement and the resilience of its infrastructure. When people are doing well, the economy does well. Energy security broadly defined is the basis of economic security which in turn is the wellspring of economic dynamism. We must invest now to build that security. The spike in bills confirms the urgency of fixing our energetic foundations with the ambition the crisis demands.