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15 Factors of Pilot Plant Cost Estimation
‘As you gather information for your pilot plant construction project, cost will undoubtedly be one of your biggest
‘questions to answer. So, how much does it cost to build a pilot plant? Like many things, it depends on a number
of key factors. By the end of this post, you'll have a basic understanding of 15 key cost factors, as well as the
tools you'll need to start building an efficient, successful pilot plant.
hitpssplotplandesign.comiblog/plot-plant-cost-estimation912212020 Researching Plot Plants? Top 15 Factors That Inuence Plot Plant Costs
Before we dive in, i's important to distinguish between the types of costs associated with pilot plants. Pilot plant
costs fall into two broad cost categories:
+ Upfront Capital Costs - engineering, design, procurement, fabrication, etc.
+ Operating Costs -raw materials, electricity, water, manual operators, etc.
This post focuses exclusively on the upfront capital costs, as they will drive most of your decisions throughout
the pilot plant design/build process, Listed below are the primary factors that will affect the upfront capital costs
and price for any pilot plant.
Pilot Plant Cost Factors
Application Complexity
‘The more complex your process is, the more money you'll spend on the pilot plant's equipment, engineering
design, modeling, and programming. Each of these drives up cost but are necessary to make the pilot plant
work properly.
Process Conditions
High temperatures and pressures increase price. The more difficult or unusual the process conditions, the
higher the cost. Factors that drive up temperature and pressure costs include:
hitpsaplotplandesign comiblog/olot-plan-cost-estimation 28912212020 Researching Plot Plants? Top 15 Factors That Inuence Plot Plant Costs
+ High viscosity fluids
+ Particulates/slurries
+ Non-Newtonian fluids
+ Degree of difficulty of separation
Instrumentation
One of the main reasons you might be considering building a pilot plant is to gather enough data to build a full
scale production facilty. To gather enough data for this, you need the proper instrumentation. Instrumentation
costs can rival, or even surpass, other equipment costs. Additional instrumentation also necessitates additional
engineering time (and costs) to specify and program.
Flow Rate
Overall unit throughput impacts cost. The greater the flow rate, the larger the required piping, vessels and
instrumentation sizes, Larger piping and instrumentation cost more, For example, a 4-inch diameter pipe is
dramatically more expensive than ¥ inch.
Number and Types of Equipment Pieces
More equipment means more money spent on purchasing equipment, and more engineering time specifying
equipment and design layouts. Some pieces of equipment are relatively expensive and can end up driving a
sizeable portion of the overall cost. For example, some specialty items (i.e. compressors, mills, and other large
rotating equipment) can only be procured by a limited number of manufacturers, which has the potential to drive
up costs.
Materials of Construction
Certain chemicals and processes require expensive materials of construction to keep your pilot plant safe and
contaminant free. Materials of construction have a large effect on piping, vessel, and instrumentation selection
and price. This is where value front end loading becomes especially important. If you work with pilot plant
engineering specialists who can plan your project materials around relatively inexpensive yet effective and
durable options, you'll be able to better control costs.
Available Utilities
Determining what utilties are already on site can allow you to use cheaper alternative equipment and not have
to have skid mounted utilities. If few on-site utiles exist, these will need to be built into the pilot plant or added
on-site.
Site Readiness
Is there an existing concrete pad at your desired install location? If not, concrete and civil work should be taken
into account. One advantage of a modular pilot plant design is that custom skids can often be designed to fit
into small existing spaces.
Modular Fabrication
Offsite modular fabrication can also save costs, especially for projects that need environmental permits. Some
permits can take up to 9 months to secure. Instead of waiting for 9 months, you can design, build and test the
hitpsaplotplandesign comiblog/olot-plan-cost-estimation912212020 Researching Plot Plants? Top 15 Factors That Inuence Plot Plant Costs
entire pilot plant offsite, avoiding further unnecessary delays.
Procurement
Specifying every detail of a vessel, (ie. nozzle orientation, nozzle sizing, piping hookups, pump requirements,
etc..) is a detailed and difficult process, Procurement can be a critical timeline factor. If done wrong, equipment
won't be available when you need it due to long leads times. The project will quickly fall behind schedule.
Putting together an accurate cost estimate for a pilot plant is non-trivial but getting a rough order of magnitude
estimate can help to see if this project is in the ballpark of what is reasonable.
Craft Labor
Setting the equipment, bolting the piping together, wiring the instrumentation and the thousand other tasks
required for any construction project are easy to underestimate. However, labor can be as expensive as the
equipment itself if you don't know where to look.
Project Management — Schedule Costs
Its easy to forget cost associated with project management when you are totaling your other expenses, but itis
probably the most vital money spent on any project. The longer a project takes, the more money it costs. The
project manager's job is to ensure everyone has what they need to keep the project moving forward on-
schedule and on-budget.
Creating a successful schedule, risk management plan, and having experience in pilot plant design/build is key
to controlling costs. Many projects fail financially at the end because this part is under-estimated. For example,
‘a common failure is an owner/operator insisting on purchasing equipment on their own or not following the
requested equipment purchasing schedule from the engineering design team.
The engineering team creates that schedule based on the equipment needed on site and the technical
specifications to finish detailed design. When purchasing isn't closely coordinated with the engineering team’s
efforts, this results in either the engineering team sitting around with nothing to do or the fabrication team sitting
around with no equipment to install. Either way, this dead time gets expensive quickly and pushes out the pilot
plant completion timeline.
Value Engineering
Value Engineering is an important part of determining and lowering costs. This is the process used to discover
ways of lowering costs. It can include things such as: throughput requirements, cutting non-critical
instrumentation, excluding mature technologies from pilot stage, modular fabrication, and more options. In a
good design/build project, value engineering is treated as an integral part of the process and involves inviting
your process engineering team and specialty contractors to identify cost-saving strategies at the beginning of
your project, in an open, collaborative approach.
Pilot Plant Costs vs. Full Production System Costs
‘The cost of a pilot plant is a small fraction of what a full production system will cost and should be viewed as an
engineering investment. You can either spend money to eliminate unknowns before you build a commercial
hitpsaplotplandesign comiblog/olot-plan-cost-estimation912212020 Researching Plot Plants? Top 15 Factors That Inuence Plot Plant Costs
scale system, or you can spend it fixing problems and dialing in the engineering during design/bulld of the
larger system.
‘Are you willing to risk having to rework your whole hundred-million-dollar production plant to save a little money
early on?
Similarly, the design work to estimate the pilot plant cost should land around 1-5 percent of the overall total cost
of the pilot plant project, Doing this work on the front end helps turn your unknowns into knowns, providing
confidence the overall project will be successful.
Controlling Costs and Planning Reliable Production Processes
AtEPIC Systems, we not only efficiently deliver excellent pilot plants, we help you refine and master your
process so you can scale it effectively at full production capacity, Our team of skilled, experienced process
engineers has spent decades helping manufacturers across the world build innovative pilot plants, while
controlling costs throughout the project. We bring a unique approach to value engineering and project planning,
enabling you to keep costs in check as you explore new production methods, processes, equipment, and more.
We'll help you uncover the right process and get the job done.
Did you find this blog useful? If so, you can download our free pilot plant cost factors guide for additional tips
and tricks on pilot plant construction projects.
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