The challenge

The Client is a natural gas distributor and retailer, delivering natural gas to homes and businesses in Tasmania.

The Client engaged Rennie to provide strategic advisory services to determine how it should respond to evolving energy markets and the future of gas. The Client sought to understand key uncertainties, market trends, and plausible future scenarios to inform diversification options and optimise long-term business positioning.

Our solution

Rennie undertook a structured approach, beginning with a thorough assessment of the Client’s operating environment, market trends, and policy, customer, and competitive uncertainties.

We developed four plausible future scenarios over a 5-10 year horizon, capturing both likely and worst-case outcomes. In collaboration with the Client’s modelling team, we assessed the potential impacts of each scenario on the business, including economics, customer demand, and local operating conditions.

Building on these insights, Rennie developed a universe of potential diversification options, encompassing renewable energy, storage, hydro, and strategic gas solutions. Each option was assessed against agreed criteria to determine viability and alignment with the Client’s strategic objectives.

This process enabled the Client to identify pathways to capitalise on opportunities from the energy transition while managing risks associated with price volatility, changing customer behaviours, and the evolving role of gas in Tasmania.

Our impact

Rennie’s advisory work provided the Client with a comprehensive understanding of how the gas market in Tasmania may evolve under multiple future scenarios. By evaluating both economic and operational implications, the Client gained confidence in the most viable diversification opportunities and the criteria for selecting strategic investments.

The project highlighted the emerging role of renewable generation, storage, and hydro, while clarifying gas’s continued relevance due to deliverability and affordability risks for customers. Analysis of residential consumption trends revealed early signals of shifting energy use, providing insight into demand management and customer engagement strategies.

Ultimately, Rennie’s work enabled the Client to prioritise a targeted set of diversification options, create a clear decision-making framework, and establish actionable pathways to strengthen its market position, mitigate risk, and capture opportunities arising from the energy transition and future gas scenarios.

Key insights

• The Australian gas supply market is changing rapidly, with domestic supply basins changing, export demand increasing, and wholesale prices experiencing record highs
• Macro economic factors such as labour shortages, supply chain issues and inflation are impacting operating costs, the ability to hire and retain staff, and to maintain customers. This trend is exaggerated in the microcosm of the Tasmania market
• Federal and state governments are increasingly intervening in the gas market, to address concerns about supply shortages and high prices, and in some cases to move away from gas as part of net zero commitments