Experts from Lee Enterprises Consulting have seen hundreds of renewable and biotechnologies progress through the research, development, and scale-up phases and performed a great many renewable energy TEA projects. As experts, we know that strong techno-economic modeling and analysis is a key to efficiently navigating this process. To succeed, any technology must be economically viable. While the term “economically viable” has different meanings for different technologies, the requirement of some standard viability holds true for all. If the developer of a technology intends to introduce a commercially relevant technology, economics is an obvious integral part of the decision-making from the very beginning. How is this best accomplished by developers? When looking at the long process of commercialization, the developer quickly realizes that making a meaningful economic prediction is a daunting and seemingly unrealistic task for them. The reason is quite simple – the unknown. While there are certainly those things the developer does know, the “unknown” is, by definition, part of any “new” technology. The developer must find a way to combine their knowledge with engineering assumptions and costing techniques. See our PPT on this subject.
This is the role of techno-economic modeling from the developer’s perspective. A techno-economic model provides a standardized framework for evaluating technology. Developers can use this TEA modeling to provide solid estimates of initial and projected profitability, establish stage gates, and track progress. With this information, developers are better prepared to make objective decisions and to change course early when roadblocks are encountered. A techno-economic model also provides a tool for understanding the impact of the process and its economic parameters. This is done using sensitivity analyses to identify critical parameters, and effectively direct R&D resources toward them. As an example, Monte Carlo analysis lets the TEA professional quantify the extent of uncertainty in results. The further the developer progresses through R&D, the more difficult and expensive it is to change course.
The investment required to develop a techno-economic model varies. However, it is a small price to pay when compared with the cost of R&D, especially with regard to correcting errors. Notwithstanding the available information, systematic economic analysis is the foundation for objective, unbiased decision-making. It lends confidence to decisions, helps avoid surprises, increases credibility with investors, and guides developers along the most efficient path to commercialization.
With over 150 consultants worldwide, Lee Enterprises Consulting has the diverse experts and geographical reach to assist in virtually any bioeconomy project, including renewable energy TEA. Our highly qualified teams bring a unique integration of technical, scientific, regulatory, and hands-on experience to any project. 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. See a video about LEC here. Call us at 1+ (501) 833-8511 or email us for more information.
