Techno-Economic Assessment Methodology for Biobased Processes

Many market introductions fail due to economic reasons and not because of process performance. A techno-economic assessment (TEA) tool can help in making good choices during process development and raise the success rate of market introduction. In this paper more information is provided on the importance of performing a TEA in an early development stage of an innovative technology. Seeing the current state of biobased processes, a TEA can help to steer further research into the most interesting pathways. The paper, therefore, elaborates on the methodology that can be used to perform such a TEA and on the specific components which should be taken into account when applying a TEA on biobased processes. A techno-economic assessment is a rather new term which is more frequently used since 2010. Although the use of techno-economic assessments is significantly increasing, no clear accepted definition exists of what constitutes a TEA. However, some efforts have been made to provide a definition of the TEA methodology. In this paper, we will use the definition provided by Kuppens (2012) in which a TEA is defined as ‘The evaluation of the technic performance or potential and the economic feasibility of a new technology that aims to improve the social or environmental impact of a technology currently in practice, and which helps decision makers in directing research and development or investments.’. Although the definition provided by Kuppens (2012) can be used, clear methodological guidelines are still lacking. Taking into account the large interest in TEAs from many different research areas, it is important to know how to perform a proper TEA. For that reason, in this paper we will first provide a clear explanation of what a TEA is and how to perform a TEA in every step of the development process. Second, the methodology will be applied on several case studies. A TEA can be divided into four different phases. As information gathering is expensive, a TEA is performed in an iterative way with a go/no-go decision after every iteration. First, a market study is performed. Second, a simplified process flow diagram (PFD) and mass and energy balance is designed. Third, this information is directly integrated into a dynamic economic evaluation. Fourth, a risk analysis is performed to identify the potential barriers. Optionally, an environmental analysis can be added as a fifth phase to produce an extended TEA. Based on the results of this cycle, risk reduction strategies can be formulated and steps can be repeated when the results sound promising. It is advisable to carry out the evaluation with a multidisciplinary team, which provides more insight and helps to attain a broad picture of the innovation process. To conclude, a TEA can provide: (1) an initial assessment on the overall technical and operational barriers to overcome, (2) an optimal sizing for the project in terms of feedstock availability or plant capacity, (3) desirable product yields and waste management and (4) an indication of the (preliminary) economic feasibility or the main technical or financial factors that limit its feasibility.