Olefins production is the largest and most important segment of the global petrochemical industry, worth over $150 Billion per year. Many opportunities and requirements exist for new technological approaches to substantially improve the cost efficiency and environmental sustainability of olefins plants worldwide. Historically, technologies have been adopted by the industry resulting in improvements in these areas, some major and some incremental. Several new technologies exist that are poised to become game changers for olefins producers. However, technology providers face many challenges related to the speed of adoption of new technology by the conservative olefins industry. There is room for improvement here that can benefit olefins producers and technology providers alike.
At the Ethylene Producers Conference in 2014, Dr. Dennis McCullough presented a paper entitled “The Path to New Technology Commercialization – Increasing the Chances for Commercial Success” where he described the typical new technology development funnel, assigning average timeframes for each step. Some specific case histories were shown that had commercialization timeframes of 15, 20 and even as long as 25 years. The details of each of the technology developments that Dr. McCullough cited in his paper and presentation materials from the conference are very interesting and worth reviewing. However, the lengthy timeframes create several practical challenges for the different parties involved:
- Delayed opportunities for end users to realize the new revenue, cost savings, sustainability impacts or other benefits expected from the technology
- More limited timeframe for the window of competitive edge
- Financing challenges for venture stage or even just small technology developers/providers – technologies can “die on the vine”
- Lack of agility to respond to changes in the business environment, both risk and opportunity oriented
Referencing Dr. McCullough’s paper and our direct experience here at Imtex Membranes, there are a number of different ways to reduce time to commercialization:
- Demonstrate only the unproven aspects of the technology
- Target early commercial adoption in retrofit applications
- Target early commercial adoption in lower risk, smaller capacity applications
- Pursue several demonstration hosts/early adopters in parallel to achieve confirmation of performance in more than one application type
- Have system designs prepared and well documented in advance
- Prepare slip-stream pilot demonstration equipment in advance and have it pretested and ready to deploy quickly
- Focus on the early adopters’ economic drivers and involve them as early as possible in the application scenario development
- Create competitive or cost incentives for early adopters
- Proactively manage the financial backing, developing backup alternatives where possible
Employ effective risk management through appropriate project management techniques (e.g. Stage-Gate®, etc.)
If technology developers and providers want to shorten the time to commercialization, we must carefully plan and manage the commercialization path and be vigilant for signs that adjustments are required as lessons are learned.
Critical collaboration with end users and other players in the channels to market must be aggressively pursued and proactively coordinated. Multiple plans need to be created to allow the flexibility needed to maintain progress towards commercialization in the face of unforeseen delays, challenges and road blocks. The resulting reduction in commercialization cycles would be sure to benefit end users and technology providers alike. There is a significant commercial advantage to be had by companies that are willing and able to adopt game changing technologies and assist in the latter stages of commercialization, reaping the rewards of early adoption.