Energy, and electricity in particular, is an important issue in Australia. Especially when in such a large state as Victoria, which includes Melbourne, blackouts occur. As if the present is not challenging enough, the future of energy is even harder to predict. What does the future energy landscape look like? New technologies, (geo)politics, consumer behavior and social changes, they all play an important role. Given the sheer unpredictability of the future of energy, Energy Safe Victoria (ESV), the government authority that, amongst other tasks, sees to the safety of the state’s electricity and gas networks, has decided to explore the future using scenario planning.
Jester Strategy has supported ESV in developing scenarios of possible futures for the Victorian energy landscape. During the project, various Australian and international experts on energy have been consulted. More importantly, a multi-disciplinary project team of ESV has taken it upon themselves to develop the scenarios and use it for generating concrete new initiatives.
Different future energy landscapes emerged
Four scenarios with four wildly different energy landscapes for 2035 were developed. Two key uncertainties formed the axes of the scenario framework. One key uncertainty was the pace with which (energy) innovations would be developed and implemented. Would new technologies cause a disruptive revolution in the energy landscape? Or will they be rather niche in an energy landscape that has only witnessed a bit of an evolution. The other key uncertainty dealt with the increasing legislative and regulatory uncertainty. Will a coherent, bipartisan (long-term and stable) vision and framework arise? Or will energy remain a political bone of contention, leading to radical policy changes when government changes hands from one party to another?
Generating options and plotting a strategic roadmap
These four scenarios all presented their own particular set of opportunities and challenges for ESV. For instance, there was a scenario in which a radically different, high tech, decentralized energy landscape took shape, requiring different skills and expertise from ESV. But there also was a scenario in which the old energy landscape fell into disrepair, challenging ESV not so much in terms of know-how but in terms of sheer manpower to ensure safety. The project team then developed strategic responses to the various challenges the scenarios presented. These responses were then detailed a bit further and subsequently stress-tested with the scenarios to see how future-proof they were, to see which ideas were good no matter what scenario. Using the OGSM method, the strategic responses were plotted on and detailed in a strategic roadmap for execution.
Monitoring change to keep roadmap responsive
Developing scenarios brought teams together who up until then seldomly brainstormed together on the future. It helped aligning on outlooks on the future and search for common challenges and opportunities. To ensure that ESV kept abreast of changes in its external environment, an Early Warning System was put in place to monitor change. By looking at how certain indicators and signposts change over time, ESV can adapt its strategic roadmap to change over time.
Want to read the full report?
The scenarios and an overview of the roadmap are available on ESV’s website. Download it here.
For more information regarding this project please feel free to contact Jeroen Toet.