Reflections: In long-range infrastructure planning, expect the unexpected
Long-term infrastructure decision makers have always faced the challenge of forecasting a future they cannot accurately predict — estimating the timing and location of the arrival of that anticipated future. In more stable times, these challenges were manageable. You might have built slightly over or under capacity, but everything eventually balanced out with linear growth.
Those times, however, are behind us.
Black swan events, unpredictable occurrences with profound societal impacts, are now commonplace. From pandemics and trade wars to political tensions and climate change-induced extreme events, the landscape is increasingly volatile. The rapid pace of technological change, evolving regulatory requirements, shifting economic trends, changing societal values, and supply chain disruptions all contribute to the heightened risk of utilities making some very costly mistakes.
So how should long-term infrastructure decision-making methodology change to adapt to this new environment of constantly shifting circumstances?
Enter adaptive planning (AP), which introduces flexibility into long-term infrastructure planning, enabling systems to remain reliable even amid unforeseen challenges. Rather than relying on single-point forecasts, AP engages decision-makers in exploring multiple plausible futures through scenario planning. By identifying these scenarios and trigger points, utilities can monitor shifting conditions and respond proactively.
Integrating these scenarios and indicators at the project level enables utilities to embed flexibility into investment and operational decisions — responding to emerging risks and seizing new opportunities. Traditional forecasting, which extrapolates from historical data, simply cannot account for today’s uncertainties, leaving utilities vulnerable to sudden disruptions.
At a recent AP workshop hosted by Canadian Water Network (CWN), leaders of Canada’s largest water utilities were asked to identify ‘known unknowns’ — a nod to Donald Rumsfeld’s famous quote — that they may need to adapt to. What would have been a difficult exercise only a few years ago was eerily easy. Will the recent immigration caps remain federal policy, leading to negative growth? Will there be an influx of conflict or climate refugees? Will U.S. tariffs continue to ramp up and disrupt long-established supply chains, causing further cost escalation? Will current centralized infrastructure planning become too expensive and be replaced with decentralized servicing? Will our water sources dry up or become contaminated beyond use? Will our digital systems be subject to cyberattack? Will the entire water sector be privatized? Will Canada be at war or annexed by our southern neighbour? The scenarios came fast and furiously.
Guest speaker Kavita Heyn — manager of the adaptive planning, demand management and climate division at Portland Water Bureau — shared a real-life example of how quickly long-held assumptions can unravel. In the early 2000s, Portland Water Bureau was in good financial shape, had a stable client base, and saw a need to expand its water supply by building a reservoir to accommodate anticipated future growth. The outlook was linear and predictable.
But things changed.
Fast forward a number of years into the future. Water conservation measures were hugely successful, reducing water demand. Several industrial users sourced their own water, leading to the loss of major clients. Then the COVID-19 pandemic hit. Thanks to AP and continuous monitoring of key indicators, Portland Water Bureau was able to pivot — and ultimately avoid a costly reservoir project.
Deterministic planning using past observations worked for a while to predict the future, but increasing uncertainty and its impacts on our utility led us to build our planning process around adaptive planning. It’s a continuous planning process that enables consideration of multiple future conditions. Instead of a traditional static long-term plan, adaptive planning provides us with the flexibility to adapt to changing circumstances. It’s given us a robust, defensible, and sustainable plan for future needs.
As Portland Water Bureau’s experience shows, AP is a critical tool for optimizing infrastructure investments, reducing unplanned expenses, and avoiding costly overbuilds and premature upgrades. Ultimately, AP helps communities safeguard water security by preparing for a range of external shocks and trends.
CWN is supporting municipal water utilities in building capacity for AP through its Adaptive Planning Community of Practice, with financial support from Natural Resources Canada. If your utility or municipality is interested in learning more, contact Tracy Patterson at [email protected].
About the Reflections blog series
Reflections is a monthly blog series authored by CWN’s CEO Nicola Crawhall. This series is designed for decision-makers navigating the complex water-related challenges. It helps leaders stay ahead of change and make informed decisions that shape the future of water in Canada.
