A publicly owned electricity grid is the only way to put a cap on costs, keep energy competitive and solve the country's energy crisis, according to an economics expert.

Professor John Quiggin says the creation of the National Electricity Market has been a failure, and governments should start buying back electricity transmission networks.

He argues without the need to generate private rates of return, public ownership of the electricity grid would push costs down, leading to lower prices for consumers.

"It's about the failure of the electricity network as a whole to deliver the kind of outcomes that have been promised for the last 25 years or so," Professor Quiggin said.

"The starting point for fixing things is a proper, publicly owned national grid."

Current system a 'comprehensive failure'

The University of Queensland economist said the National Electricity Market had been a comprehensive failure since it was established in the 1990s.

In a discussion paper about a renationalised grid, he argued under a privatised system the Government has to face up to the economic and political costs of electricity failures, but receives no cash in return.

He pointed to the South Australian blackout, the problems with loss of power at the Portland aluminium smelter, and the failure of Basslink which links Tasmania to Victoria as examples.

"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."

According to Professor Quiggin, a publicly owned electricity grid is the only way of making sure the system keeps working.

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

He said anything short of renationalisation would be a mistake.

"The national review is on [the] way to tweak the system, but I think we've seen those tweaks extensively over the past few years.

"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 delivery the goods."