Bridging The Gap Between Innovation And Commercialization


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Presentaton by Doug Machon at the International Biorefining Conference 2011

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Bridging The Gap Between Innovation And Commercialization

  1. 1. Overview<br />Just 10 years ago, most people did not give much thought to greenhouse gas (GHG), carbon footprint, energy independence, or even energy efficiency. Today, flipping a light switch and filling a gas tank generates considerable thought, and helps explain why the United States is in the midst of a historic wave of innovation aimed at developing new technologies to produce smarter, cleaner, more efficient forms of energy. The commercialization of next-generation biofuels epitomizes this effort. And yet, despite the existence of a number of impressive 2nd generation biofuels technologies, commercialization is being held up by the risk inherent in new technologies, the lack of available performance guarantees, and the dearth of project financing. <br />[NOTE: Most editors prefer only one space after a period for production reasons.]<br />The Importance of Plant Operations<br />A carefully developed plant operations approach, organization, and plan—while often overlooked by 2nd generation biofuels developers—represents a critically important variable to mitigate the technology and operations risks that are partially responsible for limiting the commercialization of next-generation biofuels plants. As the United States largest and most sophisticated provider of plant operations services, NAES Corporation helps bridge the gap between innovation and commercialization by working closely with the project owners to develop a best-practices operations plan that centers on optimizing technological performance and production, while mitigating operational risks. Ultimately, this assists developers to successfully navigate the muddy waters of obtaining project financing, and once commercial, to enhance asset profitability and value. <br />Best Practices Operations<br />Exceptional operations begin with treating plant operations as an investment. Many developers today are planning to build an internal operations capability for their planned 2nd generation production facilities without realizing its potential negative impact on project financing or commercial operations. Attempting to save a hundred-thousand dollars by developing an untested internal operations capability does not make much sense if plant performance (i.e., availability, production, etc.) is poor or (merely adequate?) or inadequate. Very few developers possess the infrastructure, capabilities, or pedigree to successfully develop and implement an operations plan for a complex next-generation biofuels facility. Fewer possess the experience to effectively work through the “shakedown” period inherent in new technologies following commercial scale-up. <br />Sophisticated plant operations start with the following best practices: <br /><ul><li>Alignment: Management of the asset to the owner’s priorities, not the OEM’s;
  2. 2. Reporting:Development and implementation of reporting standards and requirements;
  3. 3. CMMS:Implementation of a custom CMMS program to capture costs and maintenance history of all equipment and parts used;
  4. 4. Procedures:Development and implementation of custom-designed operating procedures and systems descriptions that detail exactly what it takes to operate the plant;
  5. 5. Compliance:Adherence and implementation to all local, state, and federal compliance laws in the areas of safety, environmental, etc.;
  6. 6. Oversight:Continuous project management and oversight of asset(s?) and implementation of performance engineering and optimization efforts, as needed;
  7. 7. Community:Enhancement of community relations by providing a consistent relationship with the regulator, off-takers, landowners, and environmental agencies; 
  8. 8. Technology:Formal fault-scrutiny designed to proactively identify warrantee issues and potential serial failures;
  9. 9. Performance:Development of options modeling to maximize plant performance beyond OEM contract guarantees;
  10. 10. Optimization:Deployment of comprehensive enhancement initiatives based on participation in industry user’s groups, extensive training, industry conferences, specialized workshops, and an operations practice database that numbers in the hundreds;</li></ul>The Results<br />Developers that treat plant operations as an investment and implement sophisticated plant operations principles achieve superior results, namely:<br /><ul><li>Obtaining standard commercial financing
  11. 11. Mitigating technology risk
  12. 12. Not paying fines, penalties
  13. 13. Maximizing employee safety
  14. 14. Eliminating or minimizing forced outages
  15. 15. Minimizing unscheduled repairs
  16. 16. Maximizing uptime
  17. 17. Achieving higher productivity
  18. 18. Optimizing profitability and creating long-term economic value</li></ul>The O&M best practices employed at a conventional power plant will also increase the bottom line, mitigate owner risk, and deliver top performance when implemented at a next-generation biofuel plant. <br />About NAES Corporation<br />NAES Corporation has been operating energy plants for project developers and owners for three decades and is the world’s leading independent plant operations provider with an active portfolio of 120 plants. NAES employs over 2,300 personnel including a dedicated plant operations support team that numbers 150 staff. NAES operates a diverse fleet of plants encompassing a broad range of fuels and technologies, highlighted by renewable energy derived from biomass, biosolids, hydro, landfill gas, municipal solid waste, tires, and wind. NAES has operated multiple first-of-a-kind technologies within an experience base that numbers 179 projects in 10 countries. NAES has also performed technical support services for over 300 plants in 19 countries. Founded in 1980, NAES is a wholly-owned subsidiary of a $35 billion Fortune Global 250 company. <br />