Rewiring Australia with Public Capital

Kevin Cox and John Smith

In his excellent book “The Big Switch”, Dr Saul Griffith makes a case for electrifying households and buildings to decarbonise Australia and the world. Saul presents a compelling case for Australia to demonstrate to the world how to do it using our abundant wind and solar resources. In a recent lecture in May at the Thirroul Community Centre, he also made a case for community ownership of batteries and transmission assets (the poles, wires and transformers).

Ordinarily, such a massive undertaking as electrifying Australia would require vast amounts of Capital, often from overseas.

However, a different form of Capital, “Public Capital”, is a lower-cost way to provide the money needed to rewire Australia. It will remove (or certainly reduce) the need for Australia to import Capital to move to renewables by increasing the productivity of existing Capital. Making existing Capital more productive can provide most of the funds to rewire Australia.

So, what is Public Capital? To answer this, we need to take a quick look at how we think of Capital.

Capital is the money or wealth needed to produce goods and services. It refers to the assets and money companies need to fund their usual operations and generate revenue. Capital allows businesses to cover expenses and produce their products or services. It creates income as interest, dividends, or various forms of Capital Gain. With this sort of Capital, the cost is the interest or dividends paid to the suppliers of Capital (investors). People who purchase goods or services from the enterprise pay for the profits, interest and dividends but never gain any equity in the business.

Because Capital is a product that generates income, we create Capital Markets as a way to move Capital between people and businesses. Capital in this form is expensive to operate, and we need more than necessary to produce products (because of finance and market costs).

Changing its form can increase productivity, so we need less Capital to produce more output. We obtain increased productivity by using the same amount of Capital more frequently. We achieve this by passing Capital to consumers with each sale.

Prepayments for products are a form of Capital called Public Capital. Giving an investor a discount when purchasing the product is a way of providing a return on Public Capital without requiring extra money (because you don’t pay interest). Transferring the Public Capital included in the price of a product to the buyer removes the need for Capital Markets. Dropping the value of transferred prepayments replaces the need for depreciation and the likelihood of stranded assets. Allowing Public Capital owners the same rights as shareholders spread ownership to the general public along with the care that ownership brings.

Typically Public Capital reduces the amount of money needed to fund long-lasting assets by about half over the lifetime of the assets.

Funding Community Batteries with Public Capital demonstrates how to provide the funds to build storage into the electricity network without the need to increase electricity prices to pay for the Capital works. Rather than finding new overseas funding to rewire Australia, we can fund the new infrastructure by reusing the Capital in the existing system.

Converting existing Capital into Public Capital

There are many ways to organise Public Capital. One way is to form a Non-distributing Cooperative and for members to sell some existing assets to the Cooperative and receive Public Capital in return. For example, a group of residents on the same low voltage power supply line could form a Co-op and sell some of their solar panels, batteries and inverters to the Co-op. It provides an asset base to exchange Public Capital for no cost between members (because transfers are internal to the Cooperative).

Removing this cost reduces the cost of electricity produced or stored by one member and consumed by another member.

The direct saving is the Cost of Capital. Let us assume this is 5% per annum, and the asset lasts for ten years. This funding reduces the cost of electricity exchanged between members by half. Members can use the savings to purchase more electricity assets or energy-saving assets and further reduce costs. Governments can supply interest-free loans to communities safe in the knowledge that the funds will be repaid and benefit all members.

Public Capital can provide the money to Rewire Australia without governments needing to increase taxes and with reductions in the price of electricity.


Griffith, S. (2022). The Big Switch: Australia’s electric future. Black Inc

Griffith, S. (2022). The Big Switch Pitch: Rewiring 2515 [Video]. Collins Bookstore Thirroul and Voices For Wollongong, 11 May 2022.



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Kevin Cox

Kevin works on giving individuals control over their online information - particularly their financial information with local communities.