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The assessment by the Department for Energy and Climate Change (Decc) that the smart meter rollout will bring £1 billion worth of benefits for network companies is based on inaccurate assumptions, Northern Powergrid has said.
In an evidence session to the Energy and Climate Change Select Committee today (February 2), Northern Powergrid’s chief executive Phil Jones said the assessment is based on “optimistic” judgements in what was a “relatively bullish assessment” to justify the rollout.
But he said in the transition to low carbon networks the important thing is “the management of uncertainty, and the best way of managing it is to remove it and understand it and the smart meter process will do that for networks in a big way”.
Jones said there are some “straightforward assumption areas” that are currently being addressed in a review by Decc and the trade body the Energy Networks Association in a review of the benefits case to “iron out some of those issues”.
He said Decc has incorrectly assumed that by reducing the notification period for power cuts, smart meters will will reduce the overall cost of the power cut.
“You can put an economic value on it, but it doesn’t mean the bill goes down. It doesn’t reduce the cost of digging a hole to fix the fault” Jones said.
Jones said he thinks the benefits will be “quite modest”, with Northern Powergrid’s business plan quantifying the benefits to its customers at £10 million a year for the next 15 years.
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