What is a project feasibility study or report, and why should one be done in bioeconomy-related matters? A project feasibility study is an integral part of any due diligence process in any bio related project. When a lender or investor considers putting money at risk, or when a company is considering an acquisition, new product line, or production site, they must consider all risks that may jeopardize the investment. When a project owner or developer is sourcing financing, especially for any type for a new project or new technology, they should be prepared with such a report when presenting their request to available lenders, investors, or boards of directors. Understanding the exact bio market and the risks surrounding that market, as well as what might be done to mitigate those risks, is central to the success of any investment request and ultimately to the stability of the company.
Feasibility studies and reports are used to help determine the potential of success for a specific project including potential benefits, liabilities, risks, and opportunities. Project feasibility can encompass areas like technical operations, location, legal, and scheduling – all of which are important to every bioeconomy project. A project feasibility study is useful to help the project team focus on a specific opportunity and analyze the business opportunity at a specific location.
Some of the basic information and questions that should be answered in a project feasibility study include:
- The key benefits and risks of the project.
- The critical “go/no go” parameters.
- Alternative approaches that should be considered.
- Project team’s required knowledge and experience.
- (For first commercial implementation of a new technology) – its readiness for commercial scale operations.
- Project site required utilities such as electric, gas, water, and sewer.
- Project site required transportation access such as roads and rail.
- Local, state, and federal regulatory permits required.
- Local community support of the project.
These only touch the surface of a full project feasibility report, but the takeaway is to remember that it is essential to conduct a thorough study when considering investing your own, your investors or your shareholders money in any new project. Both internal and external resources provide needed value. While many investors have in-house resources to perform parts of the assessment, precious few have the technical, economic and scientific resources, with relevant knowledge and experience, to conduct all the necessary parts of the assessment. Independent third party input provides an unbiased perspective and can help identify non-obvious issues where “the forest can’t be seen for the trees”.
Large renewable energy and biochemical consulting firms have experts in the more common areas of the bioeconomy like renewable fuels, biomaterials, biomass and biomass power, biomaterials, biochemicals and biotechnologies and in project feasibility for these types of endeavors. They should also have expertise in a wide variety of specialty services like expert witness testimony, techno-economic analysis, due diligence, feasibility studies, budgeting, project management, technology assessment, insurance, due diligence, risk management, benchmarking, intellectual property, HAZOP, financial modeling, competitor analysis, and assistance with RIN and Low Carbon Fuel Standards (LCFS) matters. These firms should also be able to assist with other things like Aspen plus, logistics, bioreactor design, municipal solid waste remediation, syngas and bio-based product development, carbon credits, climate change analysis, environmental permitting, equipment sales, experimental validations, grant writing, IP strategy, life cycle analysis (LCA), plant operations, plant sales and auctions, and risk analysis (FMEA).
Lee Enterprises Consulting is the world’s premier bioeconomy consulting group, with over 100 highly qualified experts serving in all these areas. Take a look at our experts and the services we provide. Most of our experts are also available to advise and serve as expert witnesses in bioeconomy litigation matters. For the larger projects, we specialize in putting together full service, interdisciplinary teams with one point of contact. Call us at 1+ (501) 833-8511 or email us for more information.