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.
Before we dive in, it’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
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.
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:
- High viscosity fluids
- Non-Newtonian fluids
- Degree of difficulty of separation
One of the main reasons you might be considering building a pilot plant is to gather enough data to build a full-scale production facility. 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.
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 ½ 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.
Determining what utilities are already on site can allow you to use cheaper alternative equipment and not have to have skid mounted utilities. If few on-site utilities exist, these will need to be built into the pilot plant or added on-site.
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.
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 entire pilot plant offsite, avoiding further unnecessary delays.
Specifying every detail of a vessel, (i.e. 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.
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
It’s easy to forget cost associated with project management when you are totaling your other expenses, but it is 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 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 scale system, or you can spend it fixing problems and dialing in the engineering during design/build 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
At EPIC 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.