5.1 Rationale Demonstration Scale Process

A demonstration scale is the first of its kind small scale commercial process. The purpose is to reduce the technical and business risks of the new process. Typically its capacity is 1% of the full scale process and the capital expenditure is 10% of the full scale. So if it fails partly or totally, maximally only 10% of the capital investment is lost.

There is another reason for having a demonstration scale process. It is likely that a first of its kind process design will have some redundancy introduced by the process designer to make sure that the process will work and reach its design capacity. One can do this by oversizing equipment or even adding equipment that might be needed. In the demonstration plant this redundancy is less expensive than in the full scale. Moreover, by operating the demonstration process and performing test runs this redundancy can be determined and can then be avoided in the full scale design. This redundancy can easily be 10–20% of the investment; giving a good reason for the demo-scale process.

Experience curves, also called learning curves, of processes of the same industry branch can also be used to make crude estimates of the cost reductions of subsequent plants.

Business risks with a new process are sometimes uncertainty of the market size (increase) of the product, or strategic risks; the company is not sure that it will pursue aggressive sales increase, required to get the full scale process loaded. Sometimes top management is uncertain whether the research and development has covered all technical scale-up risks and decides to have a demonstration scale process first.

The demonstration scale should be so large that the process still makes a profit, although the capital charge per ton of product, due to the small scale, is higher than for the full scale. If this is not the case then top management may lose interest in the whole new process and will not be willing to invest in the commercial scale process later.

Demonstration scale processes are typical for first of its kind oil and gas and metal processes, where the full scale requires in the order of €10 billion.

5.2 Execution Demonstration Stage

By monitoring the demonstration scale process performance in detail a large database can be made. Test runs and debottlenecking can increase the database further and allow for cost reductions later for the commercial scale design.