The pilot project stage in the long process of advancing a technology to commercialization is critically important to success and is a key focus of the Innovate Straight series co-hosted by Calgary Economic Development and Kinetica Ventures.
The fourth session in the series with 50 industry representatives focused on “pilot transition” and how a company gets a technology from the current state to the desired future state.
The panelists at the Feb. 8 session were Darius Remesat of MEG Energy, Jeffrey Schneider of RII North America and Ralph Fraile, a Solutions Executive. The conversation focused on four key elements in the process – timing, risks, costs, and planning and mindset.
Here is a synopsis of the discussion in each area:
- The purpose of piloting is not to just “get something into the field.” It is not an end in itself. The real purpose is to advance a technology towards commercialization.
- A single pilot test will almost never answer all the technical and financial questions needed for full-scale adoption and commercialization.
- This forward-looking planning is something successful companies are well versed at. It is a core part of businesses with major projects.
- By investing time upfront, companies can save significant time and money down the road as they progress through piloting and demonstration.
- Planning and committing are different things. If a series of tests are planned and the first pilot doesn’t meet thresholds, the entire plan doesn’t advance to the next stage. Plan should have numerous off-ramps if tests don’t meet certain criteria.
- If the effort is to obtain “a bit more info on a technology” consider bench testing or desktop modeling rather than a full pilot. The idea is to be agile and determine potential fatal flaws (including economic performance) in the fastest, cheapest way possible. Piloting is focused on scale-up and integration.
- Properly planned pilot tests require bench testing and economic information first as well with insights from field operations staff.
- Planning is always necessary. Without a design basis, there is no hope of successful integration. Even with a successful first pilot, it is impossible to reach successful adoption if the integration risks can’t be addressed.
- If you plan the overall sequence and get necessary input from testing labs and operations staff, you will likely to spend less money and time with less aggravation. The process decreases the overall risk.
- Uncertainty around government regulations is inevitable and proper planning provides contingencies.
- This approach doesn’t dramatically change in the way a pilot test is conducted. It is about developing a better planning framework around the tests. Planning is inexpensive and fast and will potentially lower costs if it helps focus on testing specific sets of questions.
- The end game is adoption. Small pilots are easier to fund so start small.
- Be prepared to think outside the box. The traditional “single producer hosts a single pilot at an operational site” is not the only model. Producers can collaborate to share the costs and some technology developers’ partner with their supply chain or distributor partners. There is also the potential to use a dedicated piloting “sandbox”, such as Suncor Energy’s proposed Water Technology Development Centre.
Planning & mindset:
- A big part of the transition is to realize we know how to do this. We already do design basis and long-term planning for major projects. We’re adopting a lighter, more agile version for the pilot program.
- There are several critical things every successful pilot program needs:
- Industry pull (Are we solving a problem industry views as high-priority?)
- A solid technology with real potential, including techno-economics.
- A detailed plan approved by all major stakeholders
- A process to get feedback from various people (design, procurement, operations, etc.), and integrate the feedback.
- Targeted collaboration is critical in pilot planning. A team bought into the design process is much more vested in finding solutions to challenges.
- Four key elements to a planning team:
- Someone from industry who understands technical challenges and economic realities and can effectively communicate about the problems.
- Science and R&D experts.
- Someone with strong business acumen and the ability to raise capital
- An operating team that understand the realities in the field and who are committed to making the project successful.
- Be able to articulate the value of the technology to the customer.
- Acknowledge operations staff has a major stake in the process. They need to be incentivized to take on additional risks and challenges and must see their input is heard and acted upon.
- Senior leadership needs to clearly communicate there will be setbacks along the way but there is a commitment to trust in the plan and stick with it.
Go big or go home? Or under promise and over deliver?
Give your best, most optimistic picture of the solution – but under promise and over deliver. You need a good plan and be able to answer the key business questions.
Is there a planning matrix that can help the customer easily compare solutions?
Sustainable Development Technology Canada has a good one.
To what extent is government regulation a challenge for piloting?
Regulation can be a significant barrier to a pre-commercial company. A long regulatory process will affect ability to raise capital.
How do you convince pilot host to put their careers on the line?
You need to form personal relationships with the right people and inspire them. They must be confident in the technology and the value it will bring to the organization. Pick people who have organizational support but are known to challenge the status quo. A skeptical business person who asks hard questions about how you will make money will be invaluable Incentive structures can be a help or a hindrance.
Check out other Innovate Straight Articles:
Innovate Straight Talk: Part III A Conversation about getting energy tech innovations to market
Innovate Straight Talk: Part II A conversation about getting energy tech innovations to market
Innovate Straight Talk: A conversation about getting energy tech innovations to market