The government has predicted a cost benefit of £17 billion for consumers as a result of the nationwide smart meter rollout by 2030, but Nolan said this is a “relatively conservative” estimate and he expects the benefit to consumers to be higher than that.
He added that these benefits would be achieved through greater consumer confidence and engagement in the market, through the development of dynamic tariffs from 2017.
Nolan also said he was confident the smart meter rollout would be achieved on time and on budget.
The estimated cost of the rollout, which will run up to 2020, is predicted to cost a total of £11 billion, and the Ofgem chief executive said: “We are committed to that and will make sure that happens.”
Nolan added this would be achieved by within year monitoring to ensure the suppliers are on target during the mass rollout period.
He said: “We are looking at this, not just rolling up to 2020 and seeing if suppliers have actually delivered, but we will look year in year out for 4 years preceding.
“We will be monitoring all suppliers to ensure they deliver on time, and potentially taking enforcing action against people who don’t deliver.”
Sacha Deshmukh, chief executive of Smart Energy GB (formerly the smart meter central delivery body) stated that “effective management” was required to ensure the rollout remained on time and on budget.
He added that the rollout was “unprecedented infrastructure challenge” and a “complex delivery project”, but that he remained confident that it would be achieved on cost.
Deshmukh said: “We have good, tight management from government and I think there is good management from Ofgem.
“It is in no-one’s interests to see the costs of delivery rise.”