Energy Scenarios Modelling
The current uncertainty surrounding climate change policy leads to a number of questions about how the Australian energy market might be impacted in the upcoming decades. As specific policy settings have not yet been finalised, any examination of the potential impact on the energy market will need to consider a number of different scenarios. In response to this, the Federal Department of Resources Energy and Tourism (DRET) and the Australian Energy Market Operator (AEMO) have worked together to prepare and examine a number of different energy market scenarios.
The aim of this energy scenarios work was not to predict what might occur in the future, but to examine a number of possible scenarios to gain an insight into the range of potential outcomes. The modelling exercise was high level rather than detailed, and considered a wide range of measures looking up to 40 years into the future. It is expected that this work could provide a starting point for more detailed modelling and analysis by various stakeholders and interested parties.
To support the energy scenarios modelling exercise, DRET and AEMO established an industry Stakeholder Reference Group. This group provided valuable expert input from a broad range of perspectives which improves confidence in the robustness of the analysis.
The modelling work was done in two phases as follows:
- Phase 1 in which the scenarios were defined and input data prepared. This was then modelled using two different modelling techniques looking out to the year 2030.
- Phase 2 in which the modelling was extended out to the year 2050. Only one modelling technique was used in phase 2 due to the increased complexity associated with modelling 40 years of data.
The modelling work was undertaken by considering five separate scenarios that were selected to include a wide range of outcomes for key measures such as carbon price, economic growth, social attitude, technology, fuel prices etc. All assumptions made for these and numerous other measures are set out in the final reports.
The findings of this energy scenarios work are being published by AEMO to provide information to stakeholders, which it is hoped will be helpful in trying to understand how different scenarios might play out. It is stressed however that since the analysis was based on high level modelling using a number of assumptions, these results should not be taken as predictions of any specific measures.