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Case Study
Australia’s energy system is experiencing profound transformation, driven by the rapid pace of decarbonisation, increasing adoption of distributed energy resources, and shifting market dynamics. These changes present uncertainty about how the system may evolve, creating challenges for organisations responsible for energy system policy, planning and oversight.
A division of a government energy body faced a critical question: how shjould it adapt its functions and capabilities to prepare it to meet future needs and to fulfil potentially different roles in the system? Without a clear roadmap, the division risked underinvesting in essential capabilities or misaligning efforts with emerging priorities. To address this, the division engaged Nous to provide a robust framework for capability planning, enabling informed decision-making and future-proofing its investments.
“We’re deep in the 'messy middle' of the energy transition,” says Director Tom Strawhorn. “It’s never been more important for organisations to strategise, embrace, and plan through, uncertainty.”
Turning uncertainty into clarity
Nous used a scenario-led approach to understand and navigate uncertainty and deliver practical direction for the division’s capabilities . The engagement spanned targeted stakeholder engagement, insgihts from international peers, and the application of our deep bench of energy sector expertise. This work unfolded across three distinct stages.
Constructing distinct and plausible scenarios
We began by designing a shortlist of plausible scenarios, grounded in critical uncertainties most likely to influence the division’s future role. This process involved identifying key drivers of change in the Australian energy system, such as emissions policy, infrastructure deliverability, large load growth, changing institutional planning roles, among other drivers. Each scenario outlined a unique future energy system context, with implications for how the division might need to operate and fulfil its responsibilities. These scenarios served as a lens to examine potential challenges, opportunities, and capability needs.
Assessing future capability gaps and identifying initiatives
We then translated these scenarios into capability implications through the development of a capability framework. The framework covered both core capabilities and enabling capabilities, including stakeholder engagement and data and technology management.
Deep-dive workshops with the division’s leadership provided critical insights into the capability gaps likely to emerge across different scenarios. We engaged leaders in scenario-specific discussions to pinpoint areas requiring enhancement and develop initiatives to address anticipated gaps. This collaborative approach ensured alignment between external trends and internal priorities.
Prioritising capability initiatives for planning
To ensure effective implementation, we worked closely with the division’s leadership to prioritise capability initiatives. This involved applying prioritisation criteria, enabling leaders to evaluate initiatives based on factors such as urgency, impact and feasibility.
The prioritisation framework distinguished intiatives into three categories:
- No-regret initiatives. Investments essential regardless of which scenario materialises.
- Scalable initiatives. Actions to begin immediately and scale as conditions evolve.
- Monitoring initiatives. Areas to track until clearer triggers emerge.
This tailored prioritisation process provided the division with clarity on where to act, when to invest, and where to maintain adaptability in its planning.
Prepared for change but not pinned to predictions
In the end, we delivered a new way for the division to think about their future role and a validated and prioritised set of capability initiatives that have informed ongoing business planning. The assessment clarified the capabilities most likely to matter across scenarios, enabling more targeted investment decisions and giving leadership a stronger basis for deciding what to build now, what to scale over time, and what to monitor as conditions change.
By embedding a scenario-driven and prioritised approach, we helped the government energy body navigate complexity and uncertainty, ensuring capability investments were both strategic and impactful. As Australia’s energy system continues to evolve, the division is better prepared to approach future challenges, seize emerging opportunities, and fulfil its critical responsibilities in the energy sector.
“The value of this engagement was not in predicting the future,” says Strawhorn, “but in carefully breaking general uncertainty down into manageable chunks, each with a clear impacts and implications for the organisation. This provided a stronger basis to understand tradeoffs and for business planning and future investment.”
What you can learn from our work with the government energy body:
Scenarios can be a capability planning tool. Scenario-based-thinking can capture structural shifts and uncertainty much better than traditional capability planning approaches.
Use structure to break down and navigate uncertainty. Uncertainty can be broken down into discrete drivers and scenarios, providing a common structure and language for leadership teams to make decisions with imperfect information.
Focus on decision-making, not fortune-telling. Work to only the level of detail needed to make informed decisions, avoiding ‘analysis paralysis’.
