Evolution of strategic risks under future scenarios for improved utility master plans.

Integrated, long-term risk management in the water sector is poorly developed. Whilst scenario planning has been applied to singular issues (e.g. climate change), it often misses a link to risk management because the likelihood of impacts in the long-term are frequently unaccounted for in these analyses. Here we apply the morphological approach to scenario development for a case study utility, Empresa Portuguesa das Águas Livres (EPAL). A baseline portfolio of strategic risks threatening the achievement of EPAL's corporate objectives was evolved through the lens of three future scenarios, 'water scarcity', 'financial resource scarcity' and 'strong economic growth', built on drivers such as climate, demographic, economic, regulatory and technological changes and validated through a set of expert workshops. The results represent how the baseline set of risks might develop over a 30 year period, allowing threats and opportunities to be identified and enabling strategies for master plans to be devised. We believe this to be the first combined use of risk and futures methods applied to a portfolio of strategic risks in the water utility sector.

[1]  Andrew Higgins,et al.  A Stochastic Non-linear Programming Model for a Multi-period Water Resource Allocation with Multiple Objectives , 2008 .

[2]  Jean-Louis Fusillier,et al.  Coping with Urban & Agriculture Water Demand Uncertainty in Water Management Plan Design: the Interest of Participatory Scenario Analysis , 2014, Water Resources Management.

[3]  H. Kahn,et al.  The Year 2000: A Framework for Speculation on the Next Thirty-Three Years, , 1967 .

[4]  Patricia Gober,et al.  Managing water in complex systems: An integrated water resources model for Saskatchewan, Canada , 2014, Environ. Model. Softw..

[5]  Yanuar Nugroho,et al.  Mapping issues and envisaging futures: An evolutionary scenario approach , 2012 .

[6]  George Cairns,et al.  The Role of Scenario Planning in Exploring the Environment in View of the Limitations of PEST and Its Derivatives , 2006 .

[7]  Alan AtKisson,et al.  Sustainability is Dead—Long Live Sustainability , 2006 .

[8]  D. C. Black,et al.  Towards best practice implementation and application of models for analysis of water resources management scenarios , 2014, Environ. Model. Softw..

[9]  Iain White,et al.  Environmental planning and management in an age of uncertainty: the case of the Water Framework Directive. , 2012, Journal of environmental management.

[10]  Simon J. T. Pollard,et al.  Risk Analysis and Management in the Water Utility Sector: A Review of Drivers, Tools and Techniques , 2004 .

[11]  W. Adger,et al.  Successful adaptation to climate change across scales , 2005 .

[12]  Toni Ahlqvist,et al.  Integrating future-oriented technology analysis and risk assessment methodologies , 2009 .

[13]  William J. Cosgrove.  Water Futures: the evolution of water scenarios , 2013 .

[14]  M. Frigo.  Strategic Risk Management: The New Core Competency , 2009 .

[15]  Bernard De Baets,et al.  A scenario analysis for reducing organic priority pollutants in receiving water using integrated dynamic urban fate models. , 2012, The Science of the total environment.

[16]  Ana Luís,et al.  Assessing interdependent operational, tactical and strategic risks for improved utility master plans. , 2015, Water research.

[17]  Jack E. Smith,et al.  The Big Picture – trends, drivers, wild cards, discontinuities and weak signals , 2011 .

[18]  Thomas J. Chermack,et al.  Improving decision-making with scenario planning , 2004 .

[19]  Edward G. Means,et al.  Impacts of climate change on infrastructure planning and design:Past practices and future needs , 2010 .

[20]  Tom Ritchey,et al.  Modeling Alternative Futures with General Morphological Analysis , 2011 .

[21]  Ilkka Virtanen,et al.  Theory of Futuribles , 2005 .

[22]  Alison M. St. Clair,et al.  State-of-the-technology review on water pipe condition, deterioration and failure rate prediction models! , 2012 .

[23]  Simon French,et al.  A role for human reliability analysis (HRA) in preventing drinking water incidents and securing safe drinking water. , 2009, Water research.

[24]  K. Daniell.  Practical responses to water and climate policy implementation challenges , 2013 .

[25]  Liam Fahey,et al.  Learning from the Future: Competitive Foresight Scenarios: Editors Liam Fahey and Robert M. Randall, John Wiley (1998), 446 pp., £27.50 , 1998 .

[26]  Tony Flowerdew,et al.  New Methods of Thought and Procedure , 1968 .

[27]  David W. Johnson,et al.  Joining Together: Group Theory and Group Skills , 1975 .

[28]  K. Bakker,et al.  Water Governance in Canada: Innovation and Fragmentation , 2011 .

[29]  K. Daniell,et al.  Politics of innovation in multi-level water governance systems , 2014 .

[30]  E. Clemons.  Using Scenario Analysis to Manage the Strategic Risks of Reengineering , 1995 .

[31]  Simon J T Pollard,et al.  Risk management for assuring safe drinking water. , 2006, Environment international.

[32]  Ralph L. Keeney,et al.  Value-Focused Thinking: A Path to Creative Decisionmaking , 1992 .

[33]  J. Petersen.  Out of the Blue: How to Anticipate Big Future Surprises , 1997 .

[34]  W. Huss,et al.  Scenario planning—What style should you use? , 1987 .

[35]  Stephen N. Luko,et al.  Risk Management Principles and Guidelines , 2013 .

[36]  R. Phelps,et al.  Does scenario planning affect performance? Two exploratory studies , 2001 .

[37]  N. Howden.  The relationship between land use and surface water resources in the UK , 2009 .

[38]  Hannah Kosow,et al.  Methods of Future and Scenario Analysis: Overview, Assessment, and Selection Criteria , 2008 .

[39]  George Wright,et al.  The origins and evolution of scenario techniques in long range business planning , 2005 .

[40]  R. Jacinto,et al.  Development of water use scenarios as a tool for adaptation to climate change , 2013 .

[41]  Muhammad Amer,et al.  A review of scenario planning , 2013 .