Future scenarios

Looking ahead to 2030

The transformative potential of current changes in the power market is perhaps only now becoming clear. Where it will lead and what it will mean for the future remains unknown. We’d be wrong to say it can be predicted but the survey responses to a series of ‘future scenarios’ offer some fascinating insight.

A changed balance of energy power?

“Technological advances and new sources such as shale gas will dramatically reduce dependence on oil and gas-rich countries and change the power balance between buyers and sellers.”

33% attach a low probability score to this scenario.
67% give it a medium or high probability score (49% saying medium and 18% high).

Out of all our scenarios, this one had most responses in the medium probability range and fewest low probability responses. So clearly the industry does expect a shift in the balance of power away from sources such as Russia for gas and OPEC countries for oil and gas. But, like the previous scenario, less than a fifth of survey participants are bold enough to assign it a high probability. It seems that most see a shift in the balance of power happening but don’t expect it to be decisive.

Probability scoring system: Low (probability rating of less than 40%). Medium (rating between 40-59%). High (60% or above).

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Learning lessons from the telephony sector?

“Power utility companies need to become much more tariff-clever, perhaps learning some bundling and ‘free allowance’ tricks from mobile telephony.”

36% attach a low probability score to this scenario.
64% give it a medium or high probability score (34% saying medium and 30% high).

A future where power utility companies offer ‘free power’ similar to the ‘free call’ bundles of some telephone companies is clearly not being ruled out by survey respondents. Just under two thirds see a medium or high probability of this becoming part of a more interactive relationship with customers.

Probability scoring system: Low (probability rating of less than 40%). Medium (rating between 40-59%). High (60% or above).

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The death of the current energy retailing business model?

“In the coming decades, we could see the death of the current energy retailing business model in some major world markets because of the rise of distributed generation.”

52% attach a low probability score to this scenario. 48% give it a medium or high probability score (24% saying medium and 24% high).

Although it’s the scenario that gets the highest number of ‘low probability’ responses, nearly half of survey participants see it as sufficiently possible to give it a ‘medium’ or ‘high probability’ score.

Probability scoring system: Low (probability rating of less than 40%). Medium (rating between 40-59%). High (60% or above).

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A new era of abundant energy?

“In the future concerns about energy security will become a thing of the past due to technological changes and new sources of energy.”

45% attach a low probability score to this scenario.
54% give it a medium or high probability score (36% saying medium and 18% high).

Although a substantial minority of survey participants are sceptical about this ‘breakthrough’ scenario, a majority are more positive on it. Clearly the promise of lower cost and more widespread renewable technology allied with developments such as shale gas on the fossil fuel front is leading many to look favourably on the possibility that a new abundant energy era might open up.

Probability scoring system: Low (probability rating of less than 40%). Medium (rating between 40-59%). High (60% or above).

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Will reducing emissions prove too costly?

“The nuclear/renewable investments needed to avoid significant global warming (2 degrees or less) will prove too costly for governments to support.”

32% attach a low probability score to this scenario.
68% give it a medium or high probability score (26% saying medium and 42% high).

Leading scientific assessments indicate that time is running out fast in the race to avoid significant and problematic global warming. No doubt survey participants will have been mindful of this in their responses to this scenario. It got the highest number of ‘high probability’ responses of all the scenario questions. But, perhaps what is most significant is the fact that it is the cost of reducing emissions that is the key factor as much as the race against time.

Probability scoring system: Low (probability rating of less than 40%). Medium (rating between 40-59%). High (60% or above).

2030-scenarios-graph