This page is read only. You can view the source, but not change it. Ask your administrator if you think this is wrong. <WRAP catbadge purple>General topicsstatus: review status: review </WRAP> ====== Scenarios ====== <WRAP meta> lead-authors: Klaus Kubeczko contributors: Vitaliy Soloviy reviewers: [Names] version: 1.1 updated: March 2026 sensitivity: low ai-use: Claude Sonnet 4.6 (Anthropic) assisted with editorial revision, reference verification, and formatting; reviewed by Vitaliy Soloviy, 18.03.2026 </WRAP> <WRAP intro> Scenarios help explore future possibilities via structured descriptions of plausible future states of the energy system. They can be used to examine how different combinations of technology, policy, market, and social assumptions could lead to divergent outcomes for grid infrastructure, market design, and system operation. </WRAP> ===== Why this matters ===== Grid investment decisions, generation mix choices, and the design of market rules all depend on assumptions about how the future will unfold. Scenarios make these assumptions visible and testable. Rather than committing to a single projection, scenario-based planning allows operators, regulators, and policymakers to evaluate whether proposed investments remain robust across a range of futures, and whether institutional arrangements can accommodate different trajectories for distributed generation, storage, digitalisation, and demand-side participation.((Voros, J. (2003). A generic foresight process framework. //Foresight//, 5(3), 10–21. https://doi.org/10.1108/14636680310698379)) <WRAP callout> The distinction between exploring what could happen and prescribing what should happen is what separates scenarios from forecasts and policy targets. Conflating the two reduces the analytical value of both.((International Energy Agency. (2024). //World Energy Outlook 2024.// IEA. https://www.iea.org/reports/world-energy-outlook-2024)) </WRAP> Smart grid transitions introduce uncertainty that single-point forecasts struggle to capture. Changes in generation profiles, the emergence of new market participants, and shifting roles of consumers and prosumers mean that planning frameworks built around a single expected future risk locking in infrastructure and rules that prove inadequate under conditions that were foreseeable but unexplored.((Voros, J. (2003). A generic foresight process framework. //Foresight//, 5(3), 10–21. https://doi.org/10.1108/14636680310698379)) ===== A shared definition ===== A scenario in the context of smart grid transitions is a coherent, internally consistent narrative about how the energy system might develop over a defined time horizon, typically accompanied by quantitative parameters. Scenarios are tools for exploring uncertainty rather than instruments for prediction. Their value lies in revealing how different combinations of drivers could lead to divergent outcomes for grid infrastructure, market design, and system operation.((International Energy Agency. (2024). //World Energy Outlook 2024.// IEA. https://www.iea.org/reports/world-energy-outlook-2024)) ^ Type ^ Purpose ^ Typical use ^ | **Exploratory scenarios** | Examine what could happen under different assumptions, without assigning probability or preference | Long-term energy system planning, infrastructure investment appraisal, stress-testing of grid adequacy | | **Normative scenarios** | Describe pathways toward a desired outcome, such as net-zero emissions by a target year | Backcasting exercises, policy roadmaps, technology deployment strategies | | **Forecasts** | Estimate the most likely outcome based on current trends and quantitative extrapolation | Short- to medium-term operational planning, resource adequacy assessments, market price projections | The distinction between exploratory and normative scenarios matters for smart grid planning. Exploratory scenarios help planners assess whether proposed infrastructure investments remain robust across a wide range of futures, while normative scenarios guide the sequencing of actions needed to reach a specific target.((Börjeson, L., Höjer, M., Dreborg, K.-H., Ekvall, T., & Finnveden, G. (2006). Scenario types and techniques: Towards a user's guide. //Futures//, 38(7), 723–739. https://doi.org/10.1016/j.futures.2005.12.002)) ===== Perspectives ===== Scenarios draw their strength from combining multiple analytical lenses. Actor perspectives shape what assumptions enter a scenario and whose uncertainties are represented. Technology perspectives define what is physically and operationally possible. Institutional perspectives determine what governance and market frameworks are assumed to exist. The strongest scenario exercises integrate all three. <WRAP perspectives> ==== Actors and stakeholders ==== Scenario development works best when it represents the perspectives of diverse actors who face different uncertainties and make different planning decisions. Transmission operators use scenarios to plan network reinforcements decades ahead, while distribution operators assess how quickly distributed generation and electric vehicle charging might affect local infrastructure. Policymakers use scenarios to evaluate whether proposed regulations remain effective under varying conditions, and communities affected by siting decisions gain from processes that make the assumptions behind infrastructure plans transparent. <WRAP case> **South Africa -- Department of Mineral Resources and Energy** \\ The Integrated Resource Plan, developed through multi-stakeholder consultation, uses scenarios to weigh coal phase-out pathways against renewable deployment rates and socioeconomic impacts on mining communities.((Department of Mineral Resources and Energy, South Africa. (2019). //Integrated Resource Plan 2019.// DMRE. https://www.dmre.gov.za/Portals/0/Energy_Website/IRP/2019/IRP-2019.pdf)) </WRAP> <WRAP case> **European Union -- European Environment Agency** \\ Four imaginaries — ranging from technocracy to ecotopia — were developed through participatory processes involving citizens, experts, and policymakers across member states to explore contrasting pathways toward sustainability.((European Environment Agency. (2022). //Imagining sustainable futures for Europe in 2050: A co-creation project of the EEA and its country network Eionet// (Web Report No. 16/2021). EEA. https://www.eea.europa.eu/publications/scenarios-for-a-sustainable-europe-2050)) </WRAP> <WRAP case> **Thailand -- Energy Policy and Planning Office** \\ The Power Development Plan 2015–2036 uses scenario analysis to evaluate generation mix options under different assumptions about gas availability, renewable energy costs, and cross-border power imports from neighbouring countries.((Energy Policy and Planning Office, Thailand. (2015). //Thailand Power Development Plan 2015–2036.// EPPO, Ministry of Energy. https://www.eppo.go.th/index.php/en/policy-and-plan/en-tieb/tieb-pdp)) </WRAP> ==== Technologies and infrastructure ==== Technology assumptions are central to any energy scenario. Small changes in cost trajectories for solar photovoltaics, battery storage, or hydrogen electrolysis can produce radically different infrastructure requirements. Scenario exercises need to account for technology learning curves, system integration costs, and lead times for grid reinforcement. Digital technologies — including advanced forecasting, grid automation, and data analytics — also feature as enablers of system flexibility and operational coordination. <WRAP case> **United States -- National Renewable Energy Laboratory** \\ The Standard Scenarios suite provides publicly available modelling of the US electricity sector under varying technology cost, policy, and demand assumptions, widely used across research institutions and planning bodies.((Gagnon, P., Pham, A., Cole, W., Awara, S., Barlas, A., Brown, M., Brown, P., Carag, V., Cohen, S., Hamilton, A., Ho, J., Inskeep, S., Karmakar, A., Lavin, L., Lopez, A., Mai, T., Mowers, J., Mowers, M., Murphy, C., ... Williams, T. (2023). //2023 Standard Scenarios report: A U.S. electricity sector outlook.// National Renewable Energy Laboratory. https://doi.org/10.2172/2274777)) </WRAP> <WRAP case> **Japan -- Ministry of Economy, Trade and Industry** \\ The Seventh Strategic Energy Plan uses technology scenarios to assess pathways for expanding renewable energy to 40–50% of generation by 2040, alongside nuclear restart, hydrogen co-firing, and ammonia use in thermal generation, each with distinct grid infrastructure requirements.((Ministry of Economy, Trade and Industry, Japan. (2025). //Seventh Strategic Energy Plan.// Agency for Natural Resources and Energy. https://www.enecho.meti.go.jp/en/category/others/basic_plan/)) </WRAP> <WRAP case> **Kenya -- Ministry of Energy and Petroleum** \\ The Least Cost Power Development Plan 2022–2041 uses scenarios to model different trajectories for geothermal, wind, and solar deployment alongside transmission expansion connecting generation sites in the Rift Valley and northern regions with demand centres.((Ministry of Energy and Petroleum, Kenya. (2022). //Updated Least Cost Power Development Plan, study period: 2022–2041.// Ministry of Energy, Nairobi. https://energy.go.ke/electrical-power-development-0)) </WRAP> ==== Institutional structures ==== Scenarios implicitly or explicitly assume certain institutional arrangements. A scenario with high distributed generation assumes net metering or feed-in tariff rules. A scenario with active demand response assumes market access for aggregators and appropriate metering infrastructure. Making these institutional assumptions explicit strengthens scenario quality and helps policymakers identify the regulatory reforms needed to enable preferred outcomes. <WRAP case> **Australia -- Australian Energy Market Operator** \\ The 2024 Integrated System Plan uses multiple scenarios with explicit assumptions about market design, interconnector rules, and state-level renewable energy targets to guide national transmission development planning.((Australian Energy Market Operator. (2024). //2024 Integrated System Plan.// AEMO. https://aemo.com.au/en/energy-systems/major-publications/integrated-system-plan-isp)) </WRAP> <WRAP case> **Germany -- Deutsche Energie-Agentur** \\ The dena-Netzstudie III tests how electricity, gas, and hydrogen networks can be planned together under different assumptions about sector coupling, system development pathways, and market design.((Deutsche Energie-Agentur. (2022). //dena-Netzstudie III: Abschlussbericht.// dena. https://www.dena.de/infocenter/dena-netzstudie-iii/)) </WRAP> <WRAP case> **Colombia -- Unidad de Planeación Minero Energética** \\ Generation and transmission expansion scenarios account for regulatory conditions including competitive auction design, reliability charge mechanisms, and long-term power purchase agreements for renewable projects.((International Energy Agency. (2023). //Colombia 2023: Energy Policy Review.// IEA. https://www.iea.org/reports/colombia-2023)) </WRAP> </WRAP> ===== Key terms ===== ^ Term ^ Definition ^ | **Scenario** | A coherent description of a plausible future state, used as a tool for exploring uncertainty in planning and decision-making, distinct from a prediction or forecast.((International Energy Agency. (2024). //World Energy Outlook 2024.// IEA. https://www.iea.org/reports/world-energy-outlook-2024)) | | **Exploratory scenario** | A scenario that examines what could happen under different assumptions without assigning probability or normative preference.((Börjeson, L., Höjer, M., Dreborg, K.-H., Ekvall, T., & Finnveden, G. (2006). Scenario types and techniques: Towards a user's guide. //Futures//, 38(7), 723–739. https://doi.org/10.1016/j.futures.2005.12.002)) | | **Normative scenario** | A scenario that describes a pathway toward a desired future outcome, often used in backcasting exercises for policy design.((Börjeson, L., Höjer, M., Dreborg, K.-H., Ekvall, T., & Finnveden, G. (2006). Scenario types and techniques: Towards a user's guide. //Futures//, 38(7), 723–739. https://doi.org/10.1016/j.futures.2005.12.002)) | | **Horizon scanning** | A systematic process of identifying emerging trends, signals of change, and potential disruptions that may affect the energy system, often used as an input to scenario development.((Voros, J. (2003). A generic foresight process framework. //Foresight//, 5(3), 10–21. https://doi.org/10.1108/14636680310698379)) | | **Futures cone** | A conceptual framework classifying alternative futures as projected, probable, plausible, possible, and preposterous, used to structure the range of futures considered in foresight exercises.((Voros, J. (2017). The futures cone, use and history. //The Voroscope//. https://thevoroscope.com/2017/02/24/the-futures-cone-use-and-history/)) | | **Stress-testing** | The use of scenarios to evaluate whether a plan, investment, or institution performs adequately under adverse or extreme conditions.((Australian Energy Market Operator. (2024). //2024 Integrated System Plan.// AEMO. https://aemo.com.au/en/energy-systems/major-publications/integrated-system-plan-isp)) | ===== Distinctions and overlaps ===== <WRAP distinction> **Scenario vs. forecast** \\ A forecast estimates the most likely single outcome based on historical trends and quantitative modelling. A scenario explores a range of plausible outcomes to test the robustness of plans and strategies under uncertainty. Many planning exercises use both, but confusing the two leads to false confidence in specific outcomes.((International Energy Agency. (2024). //World Energy Outlook 2024.// IEA. https://www.iea.org/reports/world-energy-outlook-2024)) </WRAP> <WRAP distinction> **Exploratory vs. normative scenarios** \\ Exploratory scenarios ask what could happen, while normative scenarios ask what needs to happen to reach a defined goal. Mixing the two in a single exercise without distinguishing them reduces the analytical value of both.((Börjeson, L., Höjer, M., Dreborg, K.-H., Ekvall, T., & Finnveden, G. (2006). Scenario types and techniques: Towards a user's guide. //Futures//, 38(7), 723–739. https://doi.org/10.1016/j.futures.2005.12.002)) </WRAP> <WRAP distinction> **Scenario vs. sensitivity analysis** \\ Sensitivity analysis varies a single parameter to test its effect on outcomes. Scenarios vary multiple parameters simultaneously within a coherent narrative, capturing interactions between drivers that sensitivity analysis misses. </WRAP> ===== Related topics ===== {{tag>flexibility resilience network_-_grid markets energy_logistics}} ===== References =====