Scenario planning as a tool for strategic management of alternative energy development

Kuznetsova Inna
Doctor of Economics, Professor, Head of Management of Organizations Department, Odessa National Economic University, Ukraine, e-mail: inna.stream27@gmail.com, ORCID ID: https://orcid.org/0000-0003-3017-6165

Balabash Olha
PhD in Economics, Associate Professor of Management of Organizations Department, Odessa National Economic University, Ukraine, e-mail: balabash.olga@gmail.com, ORCID ID: https://orcid.org/0000-0002-5794-1309

Cite this article:

Kuznetsova, І., Balabash, О. (2022). Scenario planning as a tool for strategic management of alternative energy development [Stsenarne planuvannia yak instrument stratehichnoho upravlinnia rozvytkom alternatyvnoi enerhetyky], Socio-economic research bulletin, Vìsnik socìal’noekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (82-83), pp. 137-150.

Abstract

The article formalizes the scenario planning procedure in the field of alternative energy using the cross-factor analysis method. The purpose of the article is to formalize scenario planning for the development of the alternative energy sector in the context of strategic management. The following methods were used in order to achieve the goal: cross-factor analysis, scenario planning method, expert methods, and scenario tree. The study analyzed primary energy consumption by economic sector and the total supply of primary energy by source, resulting in a declining supply of non-renewable energy sources such as oil, gas, coal and growing supply of biomass and waste, which was a source of biofuel production. The grouping of biofuel properties from the point of view of its attractiveness as an alternative energy resource was carried out. Factors that can negatively affect the pace of development of biofuel production are systematized. Dominant factors that had a critical impact on the development of biofuels have been identified: fluctuations in prices for electricity production in the traditional way, change in the popularity of greenhouse gas emission reduction programs, fluctuations in the use of electric vehicles, fluctuations in prices for fossil fuels, change in funding for programs to reduce environmental pollution and climate change. Stages of scenario planning with the use of cross-factor analysis were offered. A scenario tree model was formed. A matrix of cross-influence was constructed using expert evaluation and a scale of relations. The procedure of cross-influence and determination of dominant factors influencing on the activity development of «biofuel production» was proposed, which was characterized by the use of crossfactor analysis, which allowed assessing the probability of scenarios, establishing the interaction between them, and further calculating the expected effect from the implementation of measures. The obtained results are a reference point in the transformational processes management of the economy in conditions of fuel and energy resource limitations. Applied research results and scenario assessments of the development potential of this activity direction can be used by entrepreneurs in the context of development and further implementation of investment projects for biofuel production.

Keywords

scenario planning; cross-factor analysis; development factors; strategic management; biofuel; alternative energy.

JEL classification:O130; P460; Q180; DOI: https://doi.org/10.33987/vsed.3-4(82-83).2022.137-150

UD classification: 005.21:621.311.24

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References

1. Ensure sustainable consumption and production patterns. Sustainable Development Goals (2019), Food and Agriculture Organization (FAO): website. Retrieved from: http://www.fao.org/sustainable-development-goals/goals/goal-12/en.
2. How to feed the world’s population in 2050 (2019), Food and Agriculture Organization (FAO): website. Retrieved from: http://www.fao.org/fileadmin/templates/wsfs/docs/ synthesis_papers/How_to_Feed_the_World_in_2050_RU.pdf.
3. Battistella, С. and Toni, А. (2011). A methodology of technological foresight: A proposal and field study, Technological Forecasting and Social Change, No. 78, pр. 10291048. DOI: 10.1016/j.techfore.2011.01.006
4. Kenneth, Ch. (2008). A New Look at the Cross-Impact Matrix and its Application in Futures Studies, Journal of Futures Studies, No. 12 (4), pр. 4552.
5. Panula-Ontto, J., Luukkanen, J., Kaivo-oja, J., O'Mahony, T., Vehmas, J.,Valkealahti, S., Björkqvist, T., Korpela, T., Järventausta, P., Majanne, Y., Kojo, M., Aalto, P., Harsia, P., Kallioharju, K., Holttinen, H., &Repo, S. (2018). Cross-impact analysis of Finnish electricity system with increased renewables: Long-run energy policy challenges in balancing supply and consumption, Energy Policy, No. 118, pр. 504–513. DOI: 10.1016/j.enpol.2018.04.009.
6. Chen, J., Li, C., Ristovski, Z., Milic, A., Gu, Y., Islam, M. S., Wang, S., Hao, J., Hao, J., Zhang, H., He, C., Guo, H., Hongbo, F., Miljevic, B., Morawska, L., Thai, P., Lam, Y. F., Pereira, G., Ding, A., Huang, X., Dumka, U. C. (2017). A review of biomass burning: emissions and impacts on air quality, health and climate in China. Sci. Total Environ, No. 579, Pр. 1000–1034. DOI: 10.1016/j.scitotenv.2016.11.025.
7. Correa, D., Beyer, H., Fargione, J., Hill, J., Possingham, H., Thomas-Hall, S., Schenk, P. (2019). Towards the implementation of sustainable biofuel production systems, Renewable and Sustainable Energy Reviews , No. 107, pр. 250263. DOI: 10.1016/j.rser.2019.03.005.
8. Nugroho, Y., & Zhu, L. (2019). Platforms planning and process optimization for biofuels supply chain, Renewable Energy, No. 140, pр. 563579. DOI: 10.3390/en12214092. State Statistics Service of Ukraine: website [Derzhavna sluzhba statystyky Ukrainy: vebsait]. Retrieved from: http://ukrstat.gov.ua [in Ukrainian]
9. Balabash, O., Kuznetsova, І., Levytska, І., Zaika, S., Skrypko, T. (2022). Strategic Management of the Enterprise: Аnalysis of Sectoral Determinants, Independent Journal of Management & Production, No. 13 (3), pр. 196214. DOI: https://doi.org/10.14807/ ijmp.v13i3.1992.
10. Kuznetsova, I. O., Balabash, O. S., Karpenko, Y. V., & Sokurenko, I. A. (2022). Management decision-making: methods and models: monograph [Pryiniattia upravlinskykh rishen: metody ta modeli: monohrafiia], Disa plius, Kharkiv, 154 s. [in Ukrainian]
11. Balabash, О. & Kuznetsova, I. (2020). Technologies of strategic management of sustainable development of modern organizations: monograph [Tekhnolohii stratehichnoho upravlinnia stalym rozvytkom suchasnykh orhanizatsii: monohrafiia], Disa plіus, Kharkiv, 228 s. Retrieved from: http://dspace.oneu.edu.ua/jspui/handle/123456789/11832 [in Ukrainian]