Techno Economics - Crying Needs

What is missing in the Techno Economics (T-E) approach in your organization? Are you hiring engineers that have the knowledge, skills, and experience in T-E so people and money are focused on work that may be commercialized? This is not a new dilemma.

In 1958 Cecil Chilton wrote a paper at the 50^th AIChE anniversary titled “Economic Evaluation – Crying Needs”, and those needs were meet.  In 1989 AIChE had the symposium “Persistent Problems in Investment Appraisal”.  These problems continued, lost importance, or became worse. We have renamed the area Techno Economics (T-E) and should provide engineers the tools and resources to help make quality decisions. A significant change has been the use of process simulators to perform T-E calculations. Another is the team approach for developing technology. In the USA we graduate a total of 80,000 BS engineers in all disciplines (ChE about 5,000!) and 150,000-200,000 MBA each year, resulting in MBA’s doing more of the analysis in fuels, refining and chemicals. ABET has an implied reference to T-E in its Program Criteria, in the comment: “broad education necessary to understand the impact of engineering solutions in a global and societal context”.  To receive P.Eng. Certificate of Authorization, there is no mention at all of T-E analysis.

For Chemical Engineers, today what is missing in small to medium-sized organizations are an understanding of the principles of evaluations, the basics of deciding between alternatives and developing quality conceptual CAPEX and OPEX estimates early in a program. Our growth and new idea development are in the biofuels, biotech overall and the life science spaces, often in the small and medium-sized organizations, sometimes in the larger organizations. So that new ideas reach commercial reality, some ways to fill this gap:

• Process Development Division (PDD) identify and sponsor experts to speak on the topic at local AIChE section meetings.
• Develop up-to-date tools for conceptual estimating, many are 50 years old or older.
• Write more about the importance of T-E early in innovation programs to improve chances of commercial success. 
• Improve the knowledge and skills that chemical engineers have when receiving the undergraduate degree. In 1988 James R Couper discussed teaching problems and James B Weaver about issues with text books.  PDD can lobby ABET to include T-E in the Program Criteria and  Survey chemical engineering programs for instruction in T-E and texts used. Use data from the survey to reinforce a lobbying effort at ABET and AIChE with PDD leadership support. Focus another lobbying effort on P.Eng Certification.

 We need to be sure that ChE understand T-E well and contribute as individuals and team members to focus and guide work and money on programs that are more likely to be commercially successful.