The 2021 Inputs, Assumptions and Scenarios Report (IASR) details how AEMO will model the future in its forecasting and planning publications for the rest of 2021 and into 2022. It has been developed through 10 months of deep collaboration with a broad range of industry participants, governments, and consumer representatives.
It reflects stakeholder feedback and significant refinement of inputs and assumptions from workshops, webinars, public forums, other engagements and more than 40 submissions.
The use of scenario planning is an effective practice to manage investment and business risks when planning in highly uncertain environments, particularly through disruptive transitions. Scenarios are a critical aspect of forecasting, enabling the assessment of future risks, opportunities, and development needs in the energy industry. It is vital that the dimensions of scenarios chosen cover the potential breadth of plausible futures impacting the energy sector and capture the key uncertainties and material drivers of these possible futures in an internally consistent way.
Sensitivities serve a different purpose; they are designed to test the materiality of uncertainty associated with individual input parameters or assumptions. They aim to increase confidence in investment decisions, by testing the sensitivity of outcomes to various input uncertainties. This IASR identifies a number of sensitivities that will be applied to the 2022 ISP including variations in gas price projections, discount rates, uptake of distributed photovoltaics (PV), and future policy positions.
Read the full report here.