A “scenario matrix” is a tool for organizing and distinguishing ideas during the creation scenarios. To create a matrix, the key drivers are first prioritized using the consensus or majority vote of a team to select the two drivers that are simultaneously most uncertain and most important. Additionally, the top two drivers should be independent of one another. These two drivers are then ascribed a range of uncertainty, represented as an arrow with ends pointing in opposite directions to indicate polar extremes. Crossing these arrows creates four quadrants that function as “scaffolding” for developing distinctive scenarios.
After due consideration, the SPSG selected “technological innovation in electric supply and distribution” and “economic growth in WECC regions” as the two most important and most uncertain drivers. The resulting matrix and ranges of uncertainty are shown on the next page. It provides a starting point from which to create distinctly different worlds and a way to integrate the other drivers into a narrative structure. It has been revised in this report to show the final narrative titles for the scenarios.
The Organizing Scenario Matrix
Chart 2: WECC Transmission Scenario Matrix
The revised scenario narratives in this report are the final stories that describe very different future “worlds” or contexts for future WECC transmission decisions. The organizing scenario matrix is a conceptual device in which the future can be explored within distinct quadrants as well as by moving among the quadrants over time. The matrix serves as a sophisticated tool for distinguishing, at a glance, the major differences and starting assumptions in the imagined worlds. Movement among the quadrants to represent a plausible evolution of future conditions is discussed later in this report in the section on Early Indicators.
Point of View of the Scenarios
The scenarios are written from the point of view of a neutral observer (similar to a newspaper reporter) explaining the future as it is unfolding. In addition to the events and trends playing out in relation to the key drivers, the observer identifies the actions of four key stakeholder groups: (1) Regulators and legislators; (2) Companies in the electricity industry (investor-owned utilities, power plant and transmission system owners, operators and developers); (3) Activists and advocates for various causes, especially the environment; and (4) Electric energy consumers (residential, commercial, industrial and agricultural). Since this is an exercise in storytelling, different stakeholders may be active or dormant in particular timeframes in each of the scenarios.
Policy Implications for the Scenarios
Three of the key scenario drivers can be considered to be policy changes: (1) Changes in regulation of the electric power systems in the WECC region; (2) Changes in federal regulation affecting the power industry; and (3) Changes in society’s preferences for sustaining environmental and natural resources. Policy is rightly a very broad term so changes in policy can affect an even wider range of areas. Policies are critical because they set the rules, regulation, laws, and context for risk assessments affecting decisions about important matters, especially large capital investments, in the energy business. Policies allow the democratic process to exert influence on energy industry decisions so as to ensure they align with the desires and values of society. Clearly, policy shifts over the next decade or more can have a powerful effect across the electric power industry and thereby heavily influence generation and transmission investment decisions.
In addition, the SPSG created the Policy Development Task Force (PDTF) to explore further how other policies might affect the evolution of the WECC scenarios. The work of the PDTF also has been captured in the scenario narratives, as well as in the scenario modeling metrics.
In order to give additional coherence to such a broad area as policy and to give some indication of how they might evolve, each scenario attempts to reflect an evolution of events that are roughly consistent with the overall policy themes. These themes signify the overall context through which policy changes may arise and also indicate a predominant direction. The policy themes for each scenario are shown on the next page.
Following each of the scenario narratives is a chart, which indicates the general direction of change in policy areas. This change is consistent with the ideas and trends in the particular scenario. Those directional indicators of change will also be the basis for making modifications from a set of common case assumptions used to create quantitative analyses of the scenarios. Importantly, the overarching policy context of each scenario was used in the planning process by the Metrics Data Task Force to change quantitative variables in the Reference Case assumptions used in the 20-year modeling process using the SCDT and NXT. Those changes in the quantitative variables were best guess and consensus estimates from the MDTF based on their professional expertise, and in some cases, tied to research analyses referenced in the EPS system. In light of this work, the policy ideas were given real economic power in the modeling to change outcomes in transmission plans.
The policies in each scenario have been placed in one of five categories: (1) ‘++’ = Most aggressive; (2) ‘+’ = Aggressive; (3) ‘0’ = neutral; (4) ‘-’= Aggressive in the opposite direction; and (5) ‘– –’ = most aggressive in the opposite direction. Appendix III and Appendix IV provide further detail on the indicators and their influence within the scenarios.
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