I'll try my best to answer.
First of all, I haven't been tracking the European experience as closely, so I'm not very familiar with it. I don't want to portray myself as knowledgeable. I follow more the American experience, and whatever else is going on in Canada.
I think that Dr. Nellis's point is that you need to add rehabilitation to it, and that without it, electronic monitoring doesn't do anything. My argument would be to add rehabilitation, but you have to select medium- to high-risk clients. Low-risk people are low risk for a reason. They don't need treatment. Don't waste your money on that.
There is a fair amount of evidence that treatment provided to medium- to high-risk offenders can save enormous amounts of money. In one estimate done in the United States, if you could successfully treat one high-risk youth offender over the course of a lifetime, you would save a million dollars in court costs and all that.
My brief answer is that you can save money, but it's not because of electronic monitoring; it's because of the treatment intervention.