TESTING AND RISK PROFILING OF SUSTAINABLE AND BIO-BASED TECHNOLOGIES How to bring new technologies successfully in a competitive market. Bart van Beers, EUR.ING. sr. consultant Ingenia Consultants & Engineers May 31, 2018 Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands ARISE SYMPOSIUM ’18: CIRCULARITY THROUGH DESIGN T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 University of Twente I www.ingenia.nl E info@ingenia.nl
Our Job: Renewable technology based plants: • Design, engineering • Due diligence assessments for investors (NL, UK) • Technology Investment Risk Analyses • Business and market analyses • Development of new technologies (waste feedstock) (the bridge between science to its application) Emission & odour waste waste biomass biomass € € product electricity Ingenia input output PO Box 9550 5602 LN Eindhoven gas gas The Netherlands CAPEX - OPEX T +31 (0)40-239 30 30 water F +31 (0)40-239 30 39 electricity I www.ingenia.nl E info@ingenia.nl
Topics Renewable & biobased technologies Technology Investment Risk Profiling Latest State of Art Technology Examples Monte Carlo Risk Analysis Ingenia PO Box 9550 5602 LN Eindhoven Conclusions The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Renewable & biobased technologies • Renewable Technologies: Technologies that are used in sustainable energy production or the production of biobased materials. • Short-cyclical (carbon), preserving biodiversity and ecosystems • Netherlands : “Ladder van Lansink” principle Examples: • Anaerobic digestion of manure and waste (biogas, CHP) • Anaerobic fermentation of manure (biomethane) and N, P, K decay • Pyrolysis of waste of recycled plastics (RDF) • Gasification of waste Ingenia • Prune-wood-fired biomass power station (incineration, CHP, W-grid) PO Box 9550 • 5602 LN Eindhoven Torrefaction from wood to bio-coal The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Examples Biomass plant (district heat) Anaerobic waste digestion & Ingenia bio-methane PO Box 9550 5602 LN Eindhoven The Netherlands production T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
The plant Waste Bio-products Conversion MSW plant Bio-energy Chemicals Residu Energy The technologies: chemistry, physics, biology, thermochemical, …. Bio-energy A B D Waste Ingenia Chemicals C Bio-products E PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 Energy F +31 (0)40-239 30 39 Residu I www.ingenia.nl E info@ingenia.nl
Technology Investment Risk profiling → Goal: to quantify the risks and effects (impact) of the combination of the applied conversion technologies within the framework of the mass and energy balances. → Taking into account the effectiveness of mitigating measures → Quantitative Output = Input for Investors → Is part of a due diligence investigation Ingenia PO Box 9550 5602 LN Eindhoven → Multidisciplinary approach The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Focus • Technologies: - TRL & BAT - mass and energy balances and its sensitivity, - operational characteristics, MTBF, MTTR - redundancy, maintenance • Business economics: - Financial business plan (cash flow analysis), - Markt analysis (supply chain) - Rivalry: Porter 5-Forces model - Macro-environmental factors: PESTEL analysis • Entrepreneur: Ingenia - Legal: market conformity supply and sales contracts PO Box 9550 5602 LN Eindhoven The Netherlands - Implementation phase: project management, procedures, T +31 (0)40-239 30 30 (sub)contracting F +31 (0)40-239 30 39 I www.ingenia.nl - ORCA: organization, communication & approach E info@ingenia.nl
Scientific background Rao, A.S., TECHNOLOGY ACCEPTANCE MODEL FOR Ingenia COMPLEX TECHNOLOGIES IN A PO Box 9550 5602 LN Eindhoven The Netherlands PERIOD OF RAPID CATCHING-UP, T +31 (0)40-239 30 30 Dept of Scientific and Industrial F +31 (0)40-239 30 39 Research, New Delhi 2016 I www.ingenia.nl E info@ingenia.nl
Can we beat incumbent companies? rivalry PESTEL Impact: Low High P olitical E conomical S ocial T echnical E nvironmental L egal Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 After you have completed a PESTEL analysis you should be able to use this to help F +31 (0)40-239 30 39 you identify the strengths and weaknesses for a SWOT analysis. I www.ingenia.nl E info@ingenia.nl
State of Art Technology Best Available Technologies BAT Technology Readiness Level TRL Number of year available in market BAT BAT ? 0 Ingenia Degree of Diversity, differentiation PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
TLR and lyfecycle Degree of Diversity, differentiation TLR 10 Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands Market introduction? A B C T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Where are risks? Where is the Interfaces weakest link? Bio-energy A B D Waste Chemicals C Bio-products E Energy Residu Ingenia PO Box 9550 5602 LN Eindhoven More Unit Operations = higher chance of problems: The Netherlands T +31 (0)40-239 30 30 Cascade Effects ! F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Waste input = no homogeneous composition Input +/- Output +/- C specs specs Operational, MTBF, MTTR Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Rating Scale for Technology Risk Driver (example) Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands Branche/technology specific! T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 Source: Valerdi & Kohl (2004) I www.ingenia.nl An Approach to Technology Risk Management, MIT, Cambridge E info@ingenia.nl
RISMAN method Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
RISMAN method Risman OK? Yes Mitigation No measures Sometimes: “NO GO” Ingenia → fundamental (design) problem PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Example: Biogas production * A B Green elec.power Manure D NP product (s) E C * consumables KN product (l) * A: Bioreactor B: Post digestor Ingenia C: Shredder PO Box 9550 5602 LN Eindhoven D: CHP unit The Netherlands T +31 (0)40-239 30 30 * Special issues E: Centrifuge F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Some financial figures (Ingenia): Biogas plant (complexity: medium ): 1 st year: • 5-10% lower revenues • 15-20% higher non-recurring expenses (than in business plan estimated) Biogas plant (complexity: high ): 1 st year: • 10-15% lower revenues • 20-30% higher non-recurring expenses Market introduction of New technology TLR 8/9: • Cost price (after Design for Construction) = + 30% Ingenia (if successfully implemented) PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Example: Biobased Herman Economy Wijffels Mushroom production farm Prijs Prijs Biological drying of SMC: • Pilot equipment • Product development • Design • Market analysis • Business case Ingenia PO Box 9550 5602 LN Eindhoven The Netherlands van pilot tot ontwerp & realisatie T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Monte Carlo Risk Analysis Input Plant Output +/- delta Input +/- delta output - Raw materials (costs) - Euro change - Gas yield - IRR - Caloric value - NPV - Ash content - PBT Ingenia - ……. - Sales PO Box 9550 5602 LN Eindhoven - ……. The Netherlands T +31 (0)40-239 30 30 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Payback time Probability 1,2 End point 1 0,8 0,6 50% slope 0,4 0,2 Ingenia Starting point PO Box 9550 5602 LN Eindhoven The Netherlands 0 T +31 (0)40-239 30 30 0 2 4 6 8 10 12 14 F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
Conclusions - TIRP = multidisciplinary approach - Assessing risks requires knowledge but also experience - Many pitfalls for entrepreneurs in sustainable energy - Well thought over 'interfaces' in contracts, but also in technical design are essential - The more cross-linked sub-techniques are applied, the Ingenia greater the chance of problems . PO Box 9550 5602 LN Eindhoven The Netherlands T +31 (0)40-239 30 30 - Point of interest: Cascade effects and redundancy F +31 (0)40-239 30 39 I www.ingenia.nl E info@ingenia.nl
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