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The costs of the £12 billion mass rollout of smart meters will be kept down by competitive market pressures, according to the Department of Energy and Climate Change (Decc).
Giving evidence to the Public Accounts Committee (PAC), Daron Walker, the senior responsible officer for the smart meter rollout, said that, despite concerns about the competitiveness of the energy market, the costs would be kept under control.
Walker told MPs the costs of the rollout were already under budget in some areas, with the costs of the communications contracts coming in at £300 million lower than predicted in the impact assessment.
He said this was due to the competitive tender process for the data and communications company (DCC), the data service provider (DSP), and communications service provider (CSP) contracts.
Walker also stated that the smart meter rollout, once completed in 2020 would save, as a conservative estimate, the average UK consumer £26 per year, increasing to £43 per year by 2030.
Committee chair Margaret Hodge asked quizzed walker, and Decc permanent secretary, on how the costs would be kept low by a competitive market “when Ofgem is questioning the competitiveness of the market”.
Lovegrove stated that while there were “issues we want to deal with” in the energy market, the competitive pressures between the supply companies would keep delivery costs low.
Ofgem chief executive, Dermot Nolan, who was as giving evidence to the committee, stated that the regulator would closely monitor the DCC’s tender processes to ensure that contracts it issues represent good value and will keep the costs of the mass rollout as low as possible.
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