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Why Have An Engineering Firm Buy Your Chemical Processing Equipment During Your Project

Posted by Matt Boynton in Equipment - December 21, 2011

Industrial clients already working with an engineering firm on a project can often derive significant value by allowing the engineering firm to purchase their process equipment as part of the project. In addition to the knowledge they’ve acquired working with the client on process development; an engineering firm that purchases equipment on behalf of the client can pass on some real benefits and costs savings by managing the entire effort.

Before purchasing any equipment the client should have a detailed specification with key performance and design criteria, as well as required warranty terms. The level of detail in this specification will vary depending on the cost and complexity as well as performance risk of the equipment. Multiple bids will need to be gathered that include detailed technical and commercial information for the equipment to make an accurate “apples to apples” comparison.

Gathering this information and going through this purchasing process takes time, and requires compiling and interpreting specific data about the process. An engineering firm that is purchasing the equipment as part of the project will discuss the design parameters with the client so that they can create the detailed specification, manage the bid process, and inform the technical and commercial review of bids so that client’s time is used most efficiently while still enabling a well informed decision. Additionally, engineering firms that purchase process equipment on a regular basis are more likely to receive better pricing, contract terms, and delivery than an industrial client who buys less frequently.

After the equipment is actually purchased, the engineering firm can head the coordination efforts of expediting, inspecting, and coordinating delivery, unloading and installation. As many pieces of process equipment require special handling and inspection, hiring a process engineering firm can ensure that issues with the equipment such as damage during shipping, missing pieces, etc are avoided or handled expediently.

This also brings up the issue of liability. If the client buys the equipment and it gets damaged during shipment, offloading, etc. the client needs to spend the time to get the correct parties to fix it. Although another party is ultimately responsible, there can be significant time wasted to resolve the problem.

The final issue to consider is warranty and performance enforcement. An engineering firm can best consult on any warranty and performance problems if they arise. And because they have been involved from the beginning of the project, the chance and scope of these problems is greatly reduced.

What makes New England Attractive to Clean Technology Projects and Companies

Posted by Jennifer Savage in Clean Technology - November 18, 2011

While there is no standard definition of clean technology, the term most often refers to technologies such as renewable energy (wind and solar power, biomass, biofuels, and hydropower), electric motors/green transportation, and green chemistry. New England is home to a significant number of companies who match this definition of clean technology, and who take advantage of several existing factors by locating here. One factor clean technology companies are able to capitalize on is the existing infrastructure and knowledgeable workforce developed here by existing and past industries. Higher education institutions are a second factor and provide a well educated workforce, as well as a never ending source of new ideas and technologies to be commercialized. And lastly, broad governmental and public support has created a legislative and public funding environment that is conducive to clean technology projects and companies.

One notable industry that provided a foundation for clean technology in New England is the, now defunct, photographic film industry. Companies like Kodak and Polaroid maintained a significant presence in the area until the last decade. However, their infrastructure and knowledge base remain and have found new life with companies like Konarka, a photovoltaic company founded in 2001. Konarka’s manufacturing process requires a coating technology that lets them take advantage of the existing equipment and utilities at an old Polaroid facility, as well as the institutional knowledge from local workers. Many clean technology companies in New England have been able to take advantage of the remnants of older industries and give them new use.

Higher education has also created a rich breeding ground for clean technology companies. The University of New Hampshire has licensed a green chemistry it developed in its Nanostructured Polymers Research Center to Itaconix, start-up founded by one of its associate research professors, to develop and manufacture “environmentally friendly polymers derived from renewable resources.”[1] 1366 Technologies, which “develops innovative manufacturing solutions for silicon cell manufacturers”,[2] is commercializing technology originally developed by their team at MIT. And, Qteros, a venture capital funded cellulosic ethanol company, relies on technology based on a WW license on a patent portfolio developed by a UMASS professor. This density of college and universities allows clean technology companies to flourish both because of the skilled labor force available and the quantity and variety of new ideas and technologies developed.

Local government and public support have also played a role in the success of these companies and projects. Toray Plastics, in North Kingston, RI, is one of the companies taking advantage of this support. They are currently installing a 446KW solar photovoltaic field that will help offset their rising energy costs. Although some of this project was funded by Toray, the company is also receiving grants and loans from the Rhode Island Economic Development Corporation’s Renewable Energy Fund. Another significant project that has moved forward because of public support is Rhode Island’s wind farm being built off its coast by Deepwater Wind. Deepwater was awarded the project in 2008 and is benefitting from the $22.3 million TIGER grant (awarded by the Quonset Development Corporation, a subsidiary of the Rhode Island Economic Development Corporation) that will “expedite much needed infrastructure improvements to the Quonset pier to support…plans to construct the nation’s first offshore, deepwater wind project.” – Governor Donald L Carcieri. These projects were able to move forward not just because of public funding, but also because of public and governmental support.

Clean technology companies and projects thrive in New England for a variety of reasons. And while some of these reasons are obvious, like a plethora of higher education institutions, others are less obvious, like existing industry infrastructure, and all mean that clean technology companies and projects should seriously consider New England for their next step.

[1] http://www.itaconix.com/home.html

[2] http://www.1366tech.com/

Our Take on the Recent High-Tech Manufacturing Stimulus Package

Posted by Jennifer Savage in Government Incentives - November 01, 2011

In June, President Obama announced the Advanced Manufacturing Partnership (AMP), a plan to stimulate the economy through a $500 million investment in high-tech manufacturing. The stimulus program includes:

Creation of the National Robotics Initiative, a measure to create jobs and a expand the marketplace for robotics and unmanned systems
$70 million investment in the robotics initiative, aiding new robot research
$100 million investment supporting the Materials Genome Initiative for advanced material development, manufacture and deployment
$300 million investment in domestic manufacturing, supporting early investments in advanced composites, high-powered batteries, metal fabrication, bio-manufacturing, and alternative energy

Government support of early stage technologies and domestic manufacturing is particularly heartening to see because of its potential long term effects on job growth. Many of these companies find themselves in a position where increased demand warrants an expansion or upgrade, but capital markets are still hesitant to fund new projects. AMP seems to be trying to fill this gap with the $300 million investment in domestic manufacturing. SPEC is particularly sensitive to this issue because many of our clients fall into this area.

In fact, a recent new technology client faced this same issue when applying for a federal grant. They were still in the middle of process development and hired SPEC, not only to complete process development, but to develop the project information required on the grant application. Our work began with a review of the client’s process to date, which included:

Raw material definition
Process flow diagrams
Basic process steps
Equipment list
Controls requirements
Any unknown or problem areas that would require further study

Once this review was complete, we proceeded to develop preliminary design documentation that included the following:

Process block flow diagram
Heat and material balance
Preliminary equipment list
Preliminary layout
Scope definition for all design and construction trades

These documents were developed to a level suitable to create a +/- 30% budget, a project management plan, and a project schedule. By only developing preliminary design, SPEC was able to provide accurate project information without the high cost associated with a complete design package.

Working with an engineering firm in this way can increase the accuracy of project information, and therefore the likelihood that it will be funded. Although this does not guarantee AMP or other funding success, we have worked with several early stage technology clients such as Qteros, E Ink, and Aspen Aerogels, where our experience and ability to accurately price and schedule a project was a significant factor in the project’s success. Hopefully other early stage technology companies will find similarly experienced partners who can help them take advantage of AMP and the funding sources.

Understanding Contracting Options for Process Engineering Projects: Percent Billing versus Verified Billing and Reporting

Posted by Bob Hubert in General - October 17, 2011

SPEC offers two different contracting methods for our clients. While we can provide a traditional Lump Sum approach, we can also offer a more comprehensive open-book method. The client is given the opportunity to decide which will work best for them.

Lump Sum Approach

In its simplest terms, the Lump Sum contract promises to deliver a very specific scope of work for a fixed price. The scope of work is usually defined by clear, detailed design documents including drawings, an equipment list, and specifications.

For the industrial client with a clearly defined project and good grasp of all aspects of their process, this approach allows extremely tight budget control, limited involvement of the client’s staff resources and a greatly simplified billing methodology. The final budget is set before any work begins and design is frozen at that point in time. This limits scope creep and further man-hours expended by both the client’s team and the SPEC design team. Billing is done based on the percentage of the work completed and verified by the client.

For companies that have a less clearly defined project or a process that still requires some development work, the Lump Sum approach has some pitfalls. By limiting team involvement as the work begins, changes to the scope of work are severely limited and can only be actuated through a change order process. And because the project or process is still being defined, engineering will require more time to complete, which in turn can lengthen the time period for the entire project. For this type of client, the lump sum approach typically leads to delays and increased costs. For these companies, we normally suggest the Open Book Approach.

Open Book Approach

The open book approach sets a budget for a scope of work, but the budget and scope have some built in flexibility. The scope of work is usually defined by preliminary design documents and both parties recognize that there may be changes to the process as the project progresses.

For the company with a number of undecided variables or a fluid market situation, the open book approach allows a high level of client participation, flexibility to change the scope or process requirements but with a higher level of responsibility. The client can review all bid tabulations, internal accounting and will be invoiced based on actual costs. The result is a high level of client involvement that leads to a high level of client control of the work.

Key Differences

The big difference between these two contracting method lies in the level of responsibility and time the client wishes to invest in the project. The Lump Sum approach minimizes client involvement and responsibility while the Open Book method increases involvement and responsibility dramatically.

Neither method is better or worse than the other but their application depends on the clients situation.

Recent Chemical and Other Manufacturing Funding Successes

Posted by Matt Boynton in General - October 03, 2011

As the uncertain economic situation leaves many investors unable to support the growth of industrial/manufacturing businesses, there are some bright points on the horizon, particularly in the State of New York.

Public Investments

New York in particular has made significant investments in several area manufacturing companies this summer, approving over $1.3 million in economic development funding.

The Empire State Development Corporation approved grants for the following:

PCB Piezotronics (Depew, NY) received $500,000 to acquire land and install machinery and equipment. PCB Piezotronics develops, manufactures, and markets integrated sensors for the aerospace, defense, automotive, and other industries and claims it will retain over 500 jobs while creating 50 new positions.
SolEpoxy (Cattaraugus County, NY) received $400,000 toward the acquisition of real estate, machinery, and equipment as part of a $5.2 million project also involving the acquisition of a 300,000-square-foot manufacturing and laboratory research and development space. The company develops specialty adhesive products.
Buffalo Filter (Lancaster, NY) received $250,000 toward the construction of a new building. The maker of smoke and aerosol filters and evacuation is in the midst of a $5.35 million project involving the acquisition of land to construct a 50,000-square-foot facility as well as installation of new machinery. That project has created six jobs.
United Biochemicals (Sanborn, NY) was allotted $150,000 toward its $1.07 million project to renovate interiors and make infrastructure improvements to an existing 43,000-square-foot facility and install new machinery and equipment. The chemical manufacturing company says the grant will help maintain 31 jobs and create 22 new positions.

New York State’s investment activity is a great example of how limited public funding can be leveraged to encourage and secure private investment for local manufacturing projects.

Engineering Disciplines | Who is needed on the team for a successful project?

Posted by Carlos Pascoal in General - September 13, 2011

Industrial projects are often executed by separate firms (MEP, Structural, Process), each working on their unique piece of the project. While this approach can work for some projects, process projects can present a unique set of challenges that are better addressed by all engineering disciplines working together. For instance, an experienced and cohesive process engineering team can optimize everything from construction costs to daily operational and long-term upgrade and implementation costs. They will understand any specific, complex, and unusual needs the owner has, and work together to make sure these needs are met on budget. SPEC’s various discipline engineers all have an understanding of the end project goals and how they can work together to meet the needs of the owner.

SPEC recently had a project where the client had already purchased their equipment and needed help installing it at their facility. The client had bought an extruder and associated process equipment and asked SPEC to provide a preliminary design package and budget for its installation. Because of the complex nature of the process and equipment installed, all of SPEC’s engineering disciplines were involved to ensure a smooth integration of the new equipment into their existing facility. Below is a description of each discipline’s contribution.

1. Architectural Engineering

Reviewed the proposed layout, developed the equipment arrangement plan and documented the demo/reconstruction of any walls/doors/ceilings. The architecture team also took into account egress and fire safety issues with the renovation.

2. HVAC/Ventilation Engineering

Reviewed the equipment for heat load and exhaust requirements, then provided a design solution for modification of HVAC supply/exhaust as required. Worked with the client’s engineers to develop a room temperature/humidity specification which suited both the facility requirements for operator comfort and the specification for material processing. The equipment was designed around these requirements.

3. Electrical Engineering

Reviewed the existing building/area one-line diagram and developed a preliminary scope for powering all of the process equipment. Any special interlock or control wiring was specified using the information available on the vendor submittals. SPEC required full vendor’s schematic submittals. The electrical engineer was also responsible for any required fire alarm, security or lighting for the area.

4. Process Engineering

Worked with the client to develop a full equipment list and identify any additional equipment needed for a complete process. The process engineer also worked with the equipment vendors to define the process utilities (water, air, gas, etc.) needed to run the equipment.

5. Fire Protection

Performed a study of the existing sprinkler system to determine if the density of the system was adequate or if any changes were required. With the installation of a mezzanine, it might have been required that sprinkler heads be under the mezzanine to provide adequate coverage.

6. Structural Engineering

Looked at the existing slab to determine if it could handle the new load of the extruder. The point loads for the mezzanine were also looked at. If needed, footings would be designed in strategic areas to take the new equipment loads.

7. Project Manager

Provided the client interface and coordinated the effort of the engineering team. The project manager developed the project basis report, estimated the budget and provided milestone oversight to both the client and the engineering team.

The Yes List at SPEC Process Engineering & Construction

Posted by Steve Landau in General - August 29, 2011

We have found that many of our clients have similar questions before they begin working with a process engineering company. Because so many of these come up repeatedly, we’ve developed a type of standard “yes” list. While these don’t apply 100% of the time, they do provide a good indication of what a client can expect when performing a project with SPEC.

The client will own the AutoCAD, Word, and Excel files developed for a project
The client can decide on an approved vendor and subcontractor list
The client can view how much each subcontractor and piece of equipment costs with our
optional open-book accounting method (link to Financial Reporting post)
We can use two different types of contract methods depending on the client’s needs
We will include critical process requirements in the engineering and construction contract and our contract can be dependent on meeting these requirements
Our invoicing system will show the client full accounting of every dollar spent on the project if the optional open book accounting method is chosen.
We provide complete support for the client’s process systems.
Our engineering team takes the time to fully understand your needs and goals as an owner

We hope this list will resolve any concerns about SPEC’s technical expertise, accounting policies, process systems support and general procedures. We invite you to contact us directly for more information and any other questions you may have.

Owner’s Program at SPEC Process Engineering & Construction - Translating Your Needs into an Effective Engineering Outcome

Posted by Matt Boynton in General - June 27, 2011

The owner’s program model we have developed at SPEC Process Engineering & Construction is a document which allows the client, who is often not an engineer but a business owner or facility manager, to express the desired project outcome using readily available information within their own company. It is a practical outline of what you want your improved process or facility to do, helping us, the engineering firm, gain a clear image of your business goals with the project while avoiding any costly mistakes. At SPEC we prefer that the owner’s program be developed by the engineering firm rather than the client, and is tied into the design/build contract, often completed during the first study phase of the engineering project.

Owner’s Program Deliverables

Project Objectives (Goals, limitations, and criteria) the owner has established for the engineering project
Flow Patterns (Human, vehicular and material) that characterize manufacturing operations
Operating Units (Overall space requirements, how these units work, process flow) which will be used in the project
Job Titles (Functions, descriptions) and number of personnel assigned to each operating unit, and a description of the amount and type of space required by each
Special Processes (Flow diagrams, personnel requirements, and relationship to other processes) as defined by the owner
Equipment and Systems (Size and dimensions, process and personnel, interaction with other equipment)
Overall Utility Requirements (electrical service, water and sewer line sizing, chilled water, hot water, steam)
Existing Utility Characteristics (and utilities available) to properly design and construct the project
Special Utility Requirements (nitrogen, clean steam, hydrogen, DI water, specilaty chemical)
Site Requirements and Limitations (ceiling height, slab thickness, single v. multi-tenant facility)
Security Criteria (keyless entry, facility monitoring system, gates, guard shack)
Communications Requirements (fiber optic line, T1 line)
Future Expansion or Alteration Requirements (additional land for building/parking expansion, roof load rating for additional equipment)
Other Criteria that the owner determines must be addressed in the scope of the project

Developing an owner’s program develop early in the process can provide real, tangible benefits such as a shortened schedule, reduced design costs, and fewer errors or problems during the project. A thorough owner’s program effectively helps both the client and engineers have an accurate and practical understanding of your project. It can also act as a less costly basis for a contract, rather than a full document set, since it still addresses all of the owner’s requirements and issues. For companies that have already developed their own owner’s programs prior to hiring an engineering firm, it may still be beneficial to allow the engineers to take a second look at the owner’s program to identify any possible cost saving areas, process changes based on past project experience, and any other creative ways to save you time and money.

Fixed Price vs. Guaranteed Maxiumum Price Contracts

Posted by Bob Hubert in General - June 17, 2011

Because SPEC works with a wide variety of clients and projects, we’ve found it useful to develop two contracting methods to better fit our diverse clients. We’ve broken down the two styles of contracts here, Fixed Price and Guaranteed Maximum Price, so that we can provide some guidance for any industrial clients facing this issue.

Fixed Price
Fixed Price contracts typically result in a lower engineering project cost than Guaranteed Maximum Price (GMP), but that is not to say that these types of contracts are inherently “cheaper.” Larger clients who often have an established, well-defined project execution process and in-house engineers, typically have expended some money upfront before contracting with an engineering firm. Their engineering staff has worked through the majority of the engineering issues before we even receive the project request. Most issues have been addressed and the project and process has been well defined up front. In this case the flexibility of a GMP contract, which anticipates changes during final design, isn’t necessary.

This early effort by the client is also what keeps the contract cost down. When we can design a construction level document set without helping the client develop their process or address any unresolved engineering issues, we spend fewer man-hours on design, and ultimately, don’t need to bill the client as much for a complete engineering package.

The only caveat to a fixed price contract resulting in a lower cost is in the event the client needs to make any changes to the project that are outside the scope defined in the construction level document set. Because the contract cost is based on these design documents, rather than process performance criteria, the client will have to authorize a “change order” for the cost of the additional engineering.

Guaranteed Maximum Price (GMP)
Guaranteed Maximum Price (GMP) contracts have a maximum price established based on a process program, rather than a developed set of well-defined construction level drawings. GMP contracts are usually better suited to companies who:

Do not have a well-defined project execution method
Are still refining their manufacturing process
Don’t have a strong in-house engineering team

A GMP contract allows these companies to have flexibility with the upfront engineering without budget surprises, because the contract price has been developed based on their process program and not specific documents. The contract price is typically higher than for a fixed price contract because of the additional engineering time anticipated for design changes and process development. Although the project price is higher, the client won’t be charged for any design changes as they would be under a fixed price contract.

At the end of a project, roughly the same amount of engineering happens under each type of contract, but depending on the client and the project, this work may be done in-house, beforehand or by the engineering firm later. With a Fixed Price contract, the upfront engineering has typically been completed by the client to a level which has worked out any possible problems, and with a Guaranteed Maximum Price contract, the upfront engineering continues with the process engineering firm to fully develop the design and determine accurate engineering specifications.

The Importance of Performing a Process Review Prior to Planning your Process Expansion

Posted by Matt Boynton in General - May 27, 2011

Prior to planning any process expansion project, it’s important to perform a thorough process review and evaluation. We've written up a case study of our work with a client where this proved particularly helpful, and have outlined specific issues we found when performing this review. We were able to identify weaknesses, inefficiencies, as well as gauge the impact that an expansion would have on their overall process.

Process Review Evaluation Case Study
The client manufactures electron beam emitters to sterilize products and packaging, improve the performance of plastics and other materials, cure inks and coatings, and eliminate pollution. They are considering a significant process expansion, and hired us to perform a review and evaluation of their chilled water systems to answer questions regarding current operational issues and the impact of the expansion. Below are the highlights of the report we developed for them.

What We Found
We found a number of important issues relating to the chilled water system which could affect their expansion:

A Piping System Inspection revealed that the system was significantly different than shown on the client’s as-built drawings.
An inspection of the installed equipment revealed that there were some significant pressure drops in at the chilled water loads, which could affect the chilled water supply and distribution specifications required in an expanded system.
We discovered a surprising pressure drop (120 PSI) caused by the small diameter of the cooling coils in one of their cooling load types. This would could cause problems in expected cooling cycle once they expand the number of these loads on the system.

Conclusions
Based on our findings we drew several conclusions as to how much affect the different issues could have on their expansion:

The chilled water piping system is adequate, in size and capacity, to service the planned expansion. However, there may be a required change in piping size, depending on the selected location of the new process loads and load types.
A water treatment program needs to be instituted to properly dose the closed loop chilled water system system with oxygen scavengers & corrosion inhibitors. Replacing the entire piping system with PVC will help with the water quality issue, but will not entirely eliminate the need for a water treatment program.
Base chiller cooling capacity is adequate to accommodate planned expansions.
We determined that the system functions without make-up water because of the presence of a closed ball. This make-up volume is critical because without it, the return pressure drops below atmospheric causing a vacuum in the return header system.
We noted that the discharge pressure controller has a number of problems, including: Incorrect display readings, incorrect pressure transducer range, and incorrectly sized and located bypass pressure control valve.

Recommendations
Based on our findings and conclusions we were able to make a series of process recommendations which will help eliminate problems when the client moves forward with the expansion project. These recommendations included:

Establishing and maintaining a third party water treatment program.
The addition of pressure control valves at headers to specific load areas.
Replacing the entire chilled water carbon steel piping system with PVC.
Removing all unnecessary pressure drops by removing all drop circuit setters, all subheader circuit setters, and circuit setter at pump discharge in the chiller room.
Replace Bypass pressure control on the system to VFD Speed control of water pressure.
Replacing and relocating pressure transmitters and adjusting pressure controller ranges.

Performing a thorough process review prior to planning a chemical process expansion project can help ensure you are using the right equipment and help catch any problems with your process and include the improvements in the expansion. Identifying weaknesses and inefficiencies prior to an expansion means these problems can be fixed before or during the expansion, rather than encountering bigger problems down the road. Gauging the impact an expansion will have on the process is vital to ensuring your expansion addresses all your needs.

Recent Successes in Biofuels Funding Despite Setbacks

Posted by Matt Boynton in Alternative Fuels - May 03, 2011

The boom in biofuels may seem to have fallen after the recent expiration and reduction in government subsidies. However, there have also been recent developments both in the private and public sectors which could signal a second chance for biofuels. Here are a few companies still receiving significant investments despite the less than favorable economic climate for biofuels.

Private Funding

Mascoma

Mascoma is receiving further funding from Valero Energy to build their commercial scale plant in Kinross, Michigan. Valero would potentially invest up to $50 million in the 40 million gallon cellulosic ethanol plant, as well as provide additional project development and construction oversight. This additional investment in the project gives Mascoma a serious boost and added support in the economic viability of woody biomass-based ethanol.

In addition to the cellulosic ethanol project, Mascoma has also acquired SunOpta BioProcess Inc., a fiber preparation and pretreatment company, which gives them a stronger approach for producing ethanol and other complimentary products from non-food cellulosic feedstocks. This acquisition gives Mascoma an edge in a typically one-sided industry by enabling them to diversify their product offering beyond cellulosic ethanol and revenue stream.

Qteros

Massachusetts-based Qteros has recently received $22 million in finding in a new series C round, and signed a strategic partnership with Praj Industries in India, a decision which moves them closer towards commercial production. Qteros and Praj Industries are planning rapid development and commercialization of “Process Design Packages (PDP’s)” that take advantage of Qteros’ proprietary Q-microbe to enable cellulosic ethanol production.

Qteros, a past SPEC client for whom we helped build an pilot ethanol production process, is now able to finance its efforts towards commercialization with the recent round of funding and new partnership. Like Mascoma, Qteros’ funding and partnership now bring them one step closer to demonstrating a financially viable process.

Public Funding & Support

Biofuel Tax Incentive

Biodiesel blenders now have retroactive incentives extended through the end of 2011 through H.R. 4853: Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

This program has helped some biofuels companies remain active and further test the viability of their processes and business models, and equally important, gives them more time to secure necessary financing.

Diamond Green Diesel

Diamond Green Diesel is getting a $241M loan guarantee from the DOE to build a plant in Louisiana, funded through the ARRA. The loan guarantee will enable Diamond Green Diesel to build a 137-million gallon renewable diesel facility in Norco, Louisiana. The renewable diesel facility will fulfill nearly 14 percent of the national mandate to increase production for biomass-based diesel, by converting feedstocks, such as animal fats and used cooking oil into high-grade diesel.

The DOE’s loan guarantee in Diamond Green Diesel demonstrates that even though the government has reduced subsidies and investment in biofuels companies, there is still funding available to well positioned projects and technologies.

Part 2: Why a Bad Economy is a Good Time to Start a Capital Project

Posted by Matt Boynton in General - April 11, 2011

In one of our last posts we discussed reasons why many industrial firms are starting new capital/process projects in the midst of the bad economy. These companies are allocating funds to invest in new energy-efficient industrial equipment as well as fund major facility expansion projects. Here are some examples of companies who have had success with getting projects off the ground recently:

Fiber Glass Industries

Received a $100,000 grant from National Grid to offset the cost of their 25,000 sq foot expansion project in Amsterdam, NY. The funding will be used to partially offset the costs associated with the construction of gas and electrical facilities, and is part of $10 million the company is investing in new industrial equipment to produce advanced fiber strands. According to National Grid "Investments such as this help communities like Amsterdam remain strong…In these challenging economic times, it is important to support projects that mean expanded business and additional employment opportunities."

PCB Piezotronics

Received a $500,000 grant from Empire State Development Corporation to help purchase and install equipment in a 50,000 sq foot building to expand their sensors and instrumentation manufacturing operations. They’re currently maxing out their existing facilities, and along with the grant are investing over $3.5 million into this significant expansion project. This project will benefit the company by freeing up space in their existing facilities allowing them to optimize efficiencies by condensing operations.

Tyco Electronics

Recently applied for permission from the Newington, NH town planning board on Nov. 8th, 2010 and received approval to launch the project December 13th, 2010; receiving approval in record time. Tyco plans to build a 102,400 sq foot facility, including implementing a state-of-the-art wastewater treatment system to comply with newly-updated EPA regulations.

GW Plastics

Currently applying for Act 250 financing, GW plastics is seeking permission to add nearly 40,000 sq feet of space to their Royalton, Vermont manufacturing facility. They’ve received some opposition from the surrounding neighborhood due to the prospective traffic increase. This is a problem that companies often have to consider when expanding or moving. Read our blog post about factors to consider when relocating an industrial facility.

Evergreen Solar Move Opens Up Unique Industrial Space

Posted by Matt Boynton in Industrial Real Estate - March 28, 2011

Evergreen Solar recently decided to move their manufacturing from Devens, Massachusetts to China due to rapidly falling PV panel prices and other economic challenges that have made profitable manufacturing in Massachusetts difficult. Considered by many to be a blow to the innovative Massachusetts economy, not only because of the heavy layoffs and state investment in the facility itself, the move is also another piece of evidence showing China’s ability to lead the industry in producing cheaper solar panels (see this article for more on that topic.)

When we heard about Evergreen’s imminent move, we decided to do a little research on the facility they will soon vacate. Although it’s a not appropriate for most of the Boston area’s commercial tenants, we think it’s worth noting the many unique attributes that could make the Devens facility the perfect real estate fit for any heavy industrial user who would normally consider moving to Massachusetts to be cost prohibitive because of the available real estate. Many heavy industry companies would find the Devens space (located on a former Military base) to be a prime opportunity.

Some of the significant features for industrial users include:

Evergreen is leaving behind a 400K square foot building with 280Ksquare feet actively occupied by:
- 120K sqft of manufacturing space
- 90K sqft of support
- 60K sqft of warehouse
- 10K sqft of office space
3 RTO’s, regenerative thermal oxidizers
9 cooling towers
26 air handlers
5 air compressors
Silicon dust collection
2 boilers
Waste water treatment
With process piping for: argon, nitrogen, ammonia, and silane

As mentioned in a previous blog article, existing infrastructure can provide a significant cost savings for an industrial client, and Evergreen’s Devens facility, with its robust utility infrastructure could be just such a cost saving opportunity for the right industrial user.

Industrial Energy Efficiency, Taking Advantage of Utilities Rebates

Posted by Matt Boynton in Government Incentives - March 21, 2011

In August we outlined a number of utilities rebates available for improving industrial energy efficiency in Massachusetts, presented through Mass Save. By installing or retrofitting industrial process equipment to be more energy efficient, companies can obtain utilities rebates from companies such as NSTAR in Massachusetts. Here are two companies in New England: New York and Maine who are taking advantage of energy efficiency incentives to improve industrial energy usage:

Richardson Brands

Richardson Brands of Canajoharie, NY hired SPEC Engineering to install a new low-emission boiler as well as other energy-efficient equipment for their candy manufacturing facility. The company received a total of $1.5 million in state funding to help pay for the project, which will both improve the energy efficiency of the plant as well as help the company grow to add more than 70 jobs in the next 2-3 years. The funding breaks down into an interesting mix from various organizations:

Empire State Development has granted them $500,000
the city of Canajoharie is contributing $750,000 with New York State Community Development Block Grant funds
National Grid has granted them $400,000
the New York State Energy & Research Development Association has pledged $398,180 to the project
Richardson Brands will contribute $385,000.

GAC Chemical

GAC Chemical in Maine manufactures chemicals used in wastewater treatment processes. They are undergoing a $630,000 energy-efficiency retrofit with the help of Efficiency Maine, a state initiative to help homes and businesses improve Maine’s energy efficiency. Along with support from the Regional Greenhouse Gas Initiative, the state was able to help GAC Chemical finance half of the retrofit costs; both improving energy efficiency and helping the company compete on operational costs.

Important real estate factors for industrial clients

Posted by Matt Boynton in Industrial Real Estate - February 03, 2011

We currently have two clients considering real estate options for expansion projects and relocating their manufacturing facilities. While many manufacturing clients tend to only look at certain aspects of a building like its façade, location, or condition of the office space, we’ve learned what the important, often cost-driven, factors are for evaluating industrial real estate beyond looks.

Disposition of town towards manufacturing

Some towns are more likely to approve certain aspects of expansion or other operational considerations such as waste, chemicals stored on site, and appearance. When considering real estate, you need to take into account any challenges you may face with regard to the town planning board’s disposition towards the various aspects of manufacturing.

Surrounding neighborhood

Consider the surrounding neighborhood. Specific factors like neighboring manufacturing businesses, roads designed for heavy trucking and traffic, and other operations nearby could affect the flows of material and personnel with your facility as well as potentially conflicting factors like schools or homes.

Ceiling height for equipment

The facility should have high enough ceilings to accommodate any tall equipment you may need for your process. Because raising ceiling height can be one of the most expensive renovations to make, we have often found that it’s better to take the extra time to find a building with the correct ceiling height that only needs, other, less expensive renovations.

Electric load/capacity

It’s important to understand your current and projected power requirements when evaluating new facilities. Particularly in New England, larger square foot buildings may not have the capacity or distribution required by an industrial user because they are often built to spec as warehouses. However, if you can find a building with an electrical service of even one or two thousand amps higher than average, this can offer substantial savings.

Existing utility infrastructure

The facility should be structurally sound with adequate building steel for roof top equipment or enough adjacent land to accommodate that equipment. There should be at least an 8” floor slab to accommodate any heavy equipment. Existing substantial HVAC units can also reduce up-front costs.

Office space

Satisfying these other factors mentioned above should be taken into account before considering other improvements, such as office space. Refurbishing an office is far less expensive than raising a roof on an entire facility to fit your equipment. If the building lacks quality office space, don’t turn away before considering these other factors.

Why a Bad Economy Might Be a Good Time to Start a Manufacturing Project

Posted by Bob Hubert in General - January 10, 2011

We’ve noticed a slight increase in industrial expansion projects, equipment buying, and companies taking advantage of energy efficiency rebates for buying and installing low-emissions equipment and implementing energy-efficient processes. Although the economic reasons to hold off on these projects are obvious, we came up with a list of reasons why we think more companies are investing in process projects, even though the economy is still far from a full recovery:

Many engineering firms were hard hit by the economic downturn and as a result are being much more budget-conscious when budgeting fees for manufacturing clients.
The same has occurred with general contractors who have cut their margins on projects and are becoming more creative in budgeting. This same cost-cutting has also filtered down to subcontractors who are willing to accept lower margins as well in exchange for landing jobs
Material and equipment costs are down due to sluggish demand
Engineering and contracting companies are less busy, so they are paying more attention to the clients they have and encouraging repeat business to keep employees busy and to avoid laying people off
Since many engineering firms are less busy, projects can also be completed much faster. A faster project means lower overall cost to the customer.
Local municipalities are currently not clogged with as many permit and review requests. This is a good time to undertake projects where a site plan review or other long-term review is required.
Many additional tax incentives are available as different states and localities fight for the few projects that will bring jobs to their area. For example, Minnesota-based SAGE Electrochromics is currently building a 300,000 square foot manufacturing plant to produce energy-efficient architectural glass. According to news sources, “The $130 million construction project likely would not have happened – at least not on this scale – without the tens of millions of dollars the company received in government funding and tax breaks” and a large equity investment from St. Gobain (http://finance-commerce.com/2010/11/sage-electrochromics-expands-in-faribault/).

Working with an Engineering Firm To Save on Project Costs

Posted by Matt Boynton in General - October 18, 2010

As explained in Part 1 of this blog, consulting with an engineering firm at the outset of a manufacturing expansion or renovation project can have significant benefits for a manufacturing client. In fact, one of our recent clients had already started working with a design firm when they hired us, and their experience illustrates our point well.

SPEC was hired to act as a project manager during the preliminary phase of a consolidation project. The client had already selected a building the company owned for the relocation. They had also hired a design firm that they had worked with in the past to estimate the cost to retrofit the building. However, because the quote for renovating their own building was so high, the client, instead, considered leasing and renovating another building to ease the capital expenditure of the project.

While acting as project manager, SPEC became familiar with the client’s existing building and realized its potential. After doing some quick “back-of-napkin” calculations, and now being familiar with the client’s technology and facilities requirements, SPEC provided a quote for almost half of the design firm’s original budget. When the client’s management expressed interest in SPEC’s alternative, we then provided a full budget with real quotes and back up documentation to support our original estimate. Not only saving the client money but letting them maintain ownership of the renovations they would have put into the leased building otherwise.

Most of the savings came from several line items that, upon closer inspection, were not necessary, or had less expensive alternatives. SPEC’s experience as a design/builder of manufacturing facilities allowed us to better evaluate these line items and eventually save the client money. Below are a few of the cost savings we identified:

Initially thought to need re-piping, the sprinkler system only needed additional sprinkler heads, saving the client 51% on fire protection
Instead of replacing the HVAC system, SPEC determined the client could safely use the existing HVAC system and replace units as needed, saving the client 53% on the HVAC system
The design firm had originally included a new roof, due to leaking, but after a further inspection the leaking was not caused by the roof and, therefore, did not need to be replaced
Eliminating the drop-ceiling design over the manufacturing area saved the client 54%
A mezzanine that had been included in the original design and budget because it existed in one of the client's other smaller buildings was found to be unnecessary in the new space and was removed from the design.

So, in addition to understanding which building design elements are important to an industrial process, engineering firms can often help companies save money on new facility construction and renovation by determining critical and non-critical building issues. And while many manufacturing clients consider engineering to be the second phase of a project, engineering firms can be brought on board at any point and even partner with the design firm to ensure all the important process issues are addressed early on.

Process Projects: Using an Engineering Firm along with an Architectural Firm

Posted by Matt Boynton in General - September 20, 2010

Process projects are often started with an architectural firm, leaving the engineering issues to be addressed later on. This is common practice in commercial projects, but can cause problems when this method is used for process projects. This usually happens when a Director of Facilities, tagged as the project leader, first considers issues like building codes and layout rather than how the manufacturing process will actually work and what it will need. Consulting with an engineering firm first when planning your process project can save you a lot of work by addressing several issues up front that might never be addressed by an architect.

Although as an A/E firm, we find it valuable to have a team of experienced industrial architects working on nearly every project, we think it’s important to have an engineering lead in process projects for a few reasons:

Budget: The final project cost may not be fully considered by the architect because they may not understand the implications of the process, its equipment and its installation. Architects design to meet building codes and good design practices, but not take into account the budget and schedule considerations of a manufacturing operation. In fact, you may not know until the design is completed if you’re going to be within budget or not, and after you have already paid for the completed design package.
Cost implications: Architects typically design exactly what the client asks for, which isn’t necessarily a good thing for the manufacturing client. This means they may not suggest less expensive design options and or tell the client the cost implications of their requests because of their unfamiliarity with the requirements of the particular manufacturing process.
Understanding the manufacturing space: Architectural firms typically best design spaces they understand such as offices, lobbies, employee areas and often leave the manufacturing space as a large open area that the client will need to figure out how to make his process work in. For example, power, HVAC, chemical storage needs, and environmental concerns which relate to industrial process equipment aren’t addressed up front but play the most significant roles in budgeting, scheduling, and permitting.
Experience with process manufacturing: Design firms often work on a range of design projects, such as commercial space, retail space, parking garages, etc., and therefore don't know to take into account certain factors of designing a space around a complex manufacturing process.

You need to match the right resources to the right problem, and while architecture is a vital part of a process manufacturing project, we've had many clients who have found it valuable to consult first with engineers to determine the process needs of the project before bringing in the design firm. Designing a building during or after resolving process issues with an engineering firm can help avoid budget problems and lengthy scheduling issues.

NSTAR Energy Efficiency Rebates in Massachusetts

Posted by Matt Boynton in Clean Technology - August 17, 2010

There are new economic incentives available through Massachusetts utilities companies for businesses who upgrade industrial equipment to achieve better energy efficiency. Mass Save has organized resources outlining the different incentives offered by utilities companies and incentives for new constructions and retrofits for industrial customers. Mass Save has also helped stimulate the energy rebate program by partnering with NSTAR to increase incentives by up to 50% to help reach the governor’s goals by the end of 2010. NSTAR is just one of several Massachusetts utilities companies which offer rebates for adding energy efficient equipment to your manufacturing facility.

Using NSTAR as an example, they offer rebates for companies purchasing new energy-efficient equipment or retrofitting existing equipment to be more energy efficient. NSTAR distinguishes new construction projects and retrofits with different incentives for each, as well as different requirements to be eligible for rebates. When planning to build a new industrial process or improve your existing industrial process, check the different rebate structures listed below for both new construction and retrofits to maximize your company’s eligibility for rebates.

To be eligible for rebates, retrofit projects need to be completed within 6 months of the application, while new construction projects have up to 1.5 years to finish. Custom projects need to have detailed plans (such as Capital Cost Plans) calculating the amount of energy that will be saved, the load profile, materials and equipment estimates, and the types of equipment being used. To obtain the rebates for capital costs and installation, use an NSTAR approved contractor. 2-4 weeks after final sign off on post-inspection, the rebate goes to the client or vendor as a check, or shows up in the utility bill. Once pre-approval is given, money is held in escrow. All of the rebates can cover as much as 50% of the cost of equipment and construction, depending on how much energy is saved.

Below are the different rebates and application forms available from NSTAR for New Construction Projects and Retrofit Projects:

New Construction Projects

Retrofit Projects

Always make sure to check with your local utility when expanding your facility or buying new equipment so that you can take advantage of any available incentives. Taking these incentives into account in your cost to savings ratio will likely affect how you decide to approach your project.

Solar Energy Industry: New Developments in Government Incentives and What They Really Mean

Posted by Jennifer Savage in Clean Technology - July 27, 2010

The Obama administration has recently been strengthening efforts to establish the US as a leader in alternative energy, particularly solar power. In a recent statement after a $1.45 billion dollar conditional commitment to Abengoa Solar to build a solar field in Arizona, Energy Secretary Steven Chu said, “supporting this type of innovative renewable energy project is part of our commitment to creating a clean energy future while significantly reducing green house gases”. The US government has also provided other financial support, like a $400 million loan to Abound Solar Manufacturing LLC, to manufacture state-of-the-art thin-film solar panels.

With the recent activity in public and private funding (for instance, Konica Minolta’s $20M investment in Konarka in March), the industry is experiencing significant growth that will create thousands of jobs for Americans, not the least of which will come from increased manufacturing capacity for new thin-film photovoltaic panels.

While the government is pushing money towards solar panel manufacturers and other solar industry related companies, government support isn’t enough to make them successful. One recent example from the New York Times Energy Blog is San Francisco’s Solyndra, which received over $500 million in a federal loan guarantee, yet has been “hemorrhaging cash” and has recently retreated from an IPO to raise funds from additional private investors. Solyndra, while having unique and innovative shaped solar panels, has been challenged to find a solution which can be both profitable for them and affordable for their customers.

Many solar technology companies are still struggling to find the right mix of innovative technology, manufacturing capacity, and price point that will allow them to be successful without outside funding sources. One example is Solasta, even after receiving venture capital and a $2.7 million DOE grant, the Cambridge-based company recently shut down and its equipment and intellectual property has been sold to a Chinese academic institution. With far cheaper production costs, China is emerging as a leader in thin-film technologies. US companies need to move from pilot to commercial production faster to take advantage of this growth and compete on a range of economic and technological factors with offshore companies.

Industry growth in the US can be seen with other US companies operating in related fields moving into solar cell development. For example, Varian Semiconductor is launching a silicon solar cell manufacturing division financed by the already $204 million in revenue earned last quarter from their semiconductor equipment manufacturing business. With the solar industry growing nearly 60% in 2008, and doubling in 2009, demand for affordable and innovative solar panels is growing at a substantial rate. US solar companies need to find ways to become cost competitive with China, not only to stay in the market but to start to approach “grid parity”, the point at which solar generated electricity is as cheap as electricity from the power grid, which usually comes from fossil fuels. Achieving grid parity will be one of the key steps to making solar energy a main stream power source in the US.

Manufacturing Facility, Capital Cost Planning

Posted by Matt Boynton in General - July 08, 2010

Now that more new ventures are developing cutting edge technologies, instead of software, capital costs are becoming a significant percentage of a start-up’s funding. Investment firms and government grantors are requiring more thorough capital cost evaluations for establishing manufacturing facilities. In particular, companies such as clean tech start-ups working in biofuels, photovoltaic production, energy storage, and green materials manufacturing can have significant initial capital costs and therefore must provide detailed explanations of both capital costs and the overall plan to bring their product to pilot scale manufacturing. We’ve worked with many government and VC funded clients (including Itaconix and Anellotech) on these comprehensive project proposals. By helping our clients develop their scale up plan, these clients have gained access to vital funding.

Key information outside funding sources look for:

A clear process narrative with a good level of detail
A capital plan for all stages of manufacturing
A realistic schedule to reach commercialization for pilot production
Project plan that includes where you plan to build and subcontractors you plan to work with
Proof that you are working with an engineering firm with requisite experience

Venture capital firms and the government have similar concerns regarding what they need to see in these capital cost plans. In addition to detailed manufacturing processes and capital estimates funding providers want to see market research, industry demand, and economic forecasting to demonstrate not only how the company plans to manufacture their product, but also the need for it and why they have chosen a particular volume. These factors affect the size of the facility, the urgency with which they need to build it out, and thus the level of investment in capital costs the company actually requires.

A good example of the higher level of detail funding sources are requiring is the response the DOE had to a photovoltaic manufacturer’s application for funding. Specifically, the DOE had the following concerns:

Capital cost plans for the Photovoltaic manufacturing facility showed a lack of analysis of the demand and therefore made it unclear if the output of the proposed facility was appropriate.
Other operating factors such as stages of commercializing their product and a more thorough description of the technology were also lacking in detail.

Another common mistake start-ups can make is to simply use a generic multiplier to estimate costs. This type of estimating can result in very inaccurate budgets. And once your funding source realizes you have used this method of calculation, they will likely question your entire plan or request a more realistic budget.

Most experienced engineering firms know that the best way to arrive at a realistic budget is to develop preliminary scope documents that can be used to develop preliminary bids with vendors and subcontractors. A capital plan based on actual bids is far more likely to withstand scrutiny than one developed using a multiplier. Combining these other strategic elements of a business plan with the detailed manufacturing plan and capital cost planning can help win over most funding sources. And by hiring an engineering firm with experience in creating these capital cost plans for companies working in emerging technologies, these companies can gain the funding and investment they’re seeking much faster.

Massachusetts Incentives for Equipment Improvements and Capital Projects for Manufacturing Facilities - Part Two

Posted by Matt Boynton in Government Incentives - June 10, 2010

Manufacturing companies specializing in emerging technologies should consider moving their facilities to Massachusetts due to the resources and state incentives for expansion and equipment improvements.. Here are some examples of how specific Massachusetts-based manufacturing companies have used the various forms of financing to upgrade their facilities. Many large manufacturing companies have expanded their operations or improved their equipment in Massachusetts working with engineering firms such as SPEC, and several of our clients received state funding for both the expansion of their manufacturing facilities and the purchase of new industrial equipment:

E Ink Corporation, a developer of electronic paper displays and electronic ink technologies (most notably in devices such as the Amazon Kindle and the Sony Reader), received a $1 million loan from MassDevelopment through its Emerging Technology Fund (ETF). Cambridge-based EInk qualified for ETF financing because of its strong management team, market demand, proven fundraising record and demonstrated technical feasibility. SPEC worked with E Ink to expand its downstream process manufacturing steps to help the company facilitate a large order it received from Motorola's low cost third world cell phone product line. SPEC also upgraded and increased the capacity of E Ink's upstream reaction process by increasing the existing power feed and installing a standby generator for their critical manufacturing steps. These projects yielded an 83 percent increase in overall product yield.

Konarka Technologies, a Lowell-based thin film photovoltaic company, received $5 million in state funding through MassDevelopment's ETF and Massachusetts Renewable Energy Trust's Business Expansion Initiative. The new funding went towards Konarka's facility in New Bedford and supplements the over $100 million the company has received since 2001 through venture capital, industry partners and state incentives. Konarka contacted SPEC after ordering a new thermal oxidizer from Durr. Realizing that they would have difficulty meeting the pre-installation requirements provided by Durr, Konarka asked SPEC to help them meet design requirements, secure building permits and complete construction within three months. SPEC worked on an accelerated schedule to get the site prepared and ready for installation by the time the equipment arrived.

Qteros, formerly known as SunEthanol and often referred to as the "Microsoft of Energy," was approved for up to $100,000 in financing from MassDevelopments Brownfields Redevelopment Fund. SPEC played an instrumental role in helping Qteros select and purchase lab space, equipment and pilot scale fermentors while meeting their aggressive timetable. Along with the help of the City of Chicopee, which expedited the permitting process, Qteros was able to ramp up quickly enough to receive Department of Energy funding as well as state incentives.

Massachusetts Incentives for Capital Projects and Equipment Upgrades for Manufacturing Facilities Part I

Posted by Matt Boynton in Government Incentives - June 03, 2010

Growing green technology, chemical process, and other manufacturing companies may want to consider moving their facilities to Massachusetts thanks to state incentives meant to encourage growth in this sector. Additionally, companies already located here can benefit from state incentives for capital and equipment improvements. Manufacturing facilities can receive tax credits, bonds, loans and guarantees and specialty financing from MassDevelopment, the state's finance and development authority. Investments in industrial equipment improvements and capital expansion projects are subsidized through several key programs:

Bond Financing
Manufacturing facilities can tap into bonds from the state or federal level via the American Recovery and Reinvestment Act. These bonds typically have very low interest rates, as they often exempt from federal and state taxes. Tax-exempt bonds are usually the best option for equipment and real estate projects. They can also be supplemented by taxable bonds in cases where the company’s needs exceed its eligibility for tax-exempt bond financing.

Loans and Guarantees
MassDevelopment offers up to $1 million in loans or bank loan participation for equipment purchases and up to $5 million for real estate loans for eligible companies. Companies which export their product can receive additional financing, and, in some cases, finance 100 percent of their projects. MassDevelopment's loan programs are designed for more complex financing structures and can offer technical assistance to manufacturing facilities as well.

Tax Credit Financing

The Massachusetts Department of Revenue offers for-profit and non-profit business tax credits to companies which rehabilitate contaminated properties through its Brownfield Tax Credit Program. These credits can be applied towards state tax liabilities or sold to third parties.

Specialty Programs

Certain types of businesses may be eligible for MassDevelopment's specialty programs. For example:

The Emerging Technology Fund (ETF) provides up to $2.5 million in loans and $1 million in loan guarantees for tech companies that benefit the Massachusetts economy.
Exporter Financing programs provide technical assistance, overseas market research, interest-free 100 percent financing for equipment, insurance on foreign receivables and other incentives for exporters in the state.
The Brownfield Redevelopment Fund provides up to $100,000 in financing for site assessment of contaminated or underutilized industrial space as well as $500,000 in financing for environmental clean up. This is available in addition to the Brownfield Tax Credit Program.

Energy Efficiency Incentives
Manufacturing facilities in Massachusetts are eligible for rebates, low interest loans, tax credits and production incentives (i.e. renewable energy credits) for incorporating renewable energy or energy efficient improvements. These incentives can come from state or local departments--such as the Micro Wind Initiative offered through MassCEC, or from utility companies such as Holyoke Gas & Electric Commercial Energy Efficiency Loan Program. Taking advantages of these programs allow businesses to save in upfront costs as well as over time through lower utilities bills.

Scaling Up Ethanol Production for Emerging Biofuel Feedstocks

Posted by Matt Boynton in Alternative Fuels - May 13, 2010

With the investment in research and development of second and third-generation biofuel feedstocks, process engineering firms are seeing a rise in scale-up projects for ethanol production. However, some companies are now finding it difficult to move beyond R&D to pilot or commercial scale production for a variety of reasons. The most prohibiting factor many companies face when making the shift from pilot facility to commercial-scale production is the financing of these larger-scale ethanol processes.

Pursuing a pilot or commercial scale ethanol process requires a substantial capital investment in equipment and engineering, and many firms are unable to build these facilities due to a lack of financing. Even with government DOE grants and loan guarantees, companies find they hit a wall in building large-scale biofuels plants with the lack of available private or venture capital funding as compared to wind and solar projects. First-generation ethanol projects had the support of corn growers and companies with a vested interest in these first-generation feed stocks, while other biofuels companies are driven to seek debt financing or scrape together enough venture capital, both of which are currently hard to come by.

Many companies in this position are teaming up with organizations such as the NREL (National Renewable Energy Laboratory), which helps companies collectively solicit the DOE for ARRA (American Recovery and Reinvestment Act) grants. The NREL also helps companies test and prove the effectiveness and financial viability of their new technologies, as well as providing a conduit for companies to raise cash as they move from pilot facility to commercial production.

The conditions of these energy grants are often milestone-based. For example, Verenium Corporation (Nasdaq: VRNM) was recently awarded an additional $4.9 million from the DOE to support the development of their demonstration-scale cellulosic ethanol biorefinery facility. This grant is an extension of a 2008 grant following their successes in demonstration the viability of their technology. Mascoma Corporation, having already received well over $100 million in funding from both venture capital and the Michigan state development corporation, has recently raised $3.4 million of a $10 million convertible-debt financing round. While the conditions of this particular round were not disclosed, convertible debt financing is typically linked to an event or milestone which triggers the remainder of the investment to take effect.

As more of these companies are able to raise sufficient financing to pursue their large-scale processes, engineering firms which specialize in scaling up emerging technologies will see a rise in demand for both designing pilot facilities as well as large-scale commercial ethanol production.

The Value of Early Engineering

Posted by Jennifer Savage in General - April 30, 2010

Clients often question us about our unique approach to executing design/build projects. Specifically, they question the value of the preliminary design package (Design Basis Report) we create very early in the project, typically for a small fixed fee. It’s not that we’re adding extra cost to your project, or trying to differentiate ourselves in some artificial way from the competition. It actually comes from our understanding that a round of preliminary engineering makes everyone much happier in the long run.

By happier I mean that SPEC and the client are on the same page from a much earlier point in the project. We, the engineering firm, have a better understanding of the client’s needs, and the client has a much better idea of what they’re getting at the end of the project. It’s really a win-win situation, and if you’ve executed any type of manufacturing or industrial process project, you can probably appreciate our approach.

Specifically, the Design Basis Report gives the client some very real benefits:

Ensures the client and SPEC are the same page for everything: project scope, deliverables, schedule, and budget (before the client has spent a lot of money having detailed engineering done).
Reduces permitting time because the preliminary design documents can be submitted early, as a preview, to the town (avoiding nasty surprises later on). It also lets potential permitting issues be worked out during detailed design, not after it’s already been completed.
Saves the client money because they know exactly what they’re getting early on, and they don’t have to waste money changing construction level drawings when they realize the scope isn’t what they wanted.
Potentially reduces the schedule by allowing the SPEC to identify and order long lead equipment, if the client agrees.

So the overall benefit of Design Basis Report is a better executed project. Clients find that it requires much less effort on their part to ensure that budget and schedule parameters are met, and the result is a successful project.

Case Studies on Air Emissions Control Technologies

Posted by Jennifer Savage in General - April 02, 2010

SPEC has worked with several clients in their efforts to comply with EPA regulations. We have supported our clients in various capacities from providing calculations for permit applications to actually evaluating control technology and installing it at the client’s site.

Some case studies are below:

One client who had already hired an environmental consultant to help prepare their emissions permit as part of their expansion project, when SPEC was brought on to provide calculations and emissions estimates as well as documents to estimate the size and specifications of the control technology required. During the evaluation, it was determined that although the client had already implemented scrubbing technology for their ammonia emissions, their expansion would increase the levels of ethanol which would need to be controlled by a regenerative thermal oxidizer. After helping provide the emissions documentation for the application, SPEC installed the regenerative thermal oxidizer on site to bring the client into compliance.

Another client who hired SPEC for a relocation and process expansion project, for which they knew there would be some emissions to address but hadn’t yet defined the scope of what the emissions were (toluene, acetone, and methyl ethyl ketone (MEK)) or how to control them. While they were investigating their emissions, the client found out they fell under a regulation that required them to perform a BACT (Best Achievable Control Technology) analysis – to determine not only the technology that would control the emissions best, but would also be cost effective (i.e. reduce how many tons of emissions/dollar spent). SPEC helped the client perform the BACT analysis, supplying the calculations and then recommending the technology that best fit with the BACT guidelines.

A client who had been fined by the DEP and were told they had to take action to reduce their emissions. They already had a scrubber in place to control their process emissions; however, they were required to install a control technology to reduce their emissions further. They chose a regenerative thermal oxidizer because they couldn’t recycle the air in their facility, so when they discharged the emissions they were also losing the heat that was in their air. Installing a regenerative thermal oxidizer allowed them to pass the air with their emissions through it so that it burned off the emissions and then discharged “clean” air while also retaining the heat in their facility so that it isn’t wasted. SPEC specified and purchased the RTO for the client as well as completed the design and installation of the associated HVAC system improvements.

Companies establishing new plants or modifying their processes should always err on the side of caution: installing control technology, such as, a thermal oxidizer preemptively, before high levels of toxic emissions are produced. Although EPA regulations and state environmental regulations are often confusing or difficult to implement, the alternative of a fine plus required compliance with regulations means that it is almost always more cost effective to implement the control technology during an expansion, renovation, or change to a manufacturing process.

Foreign-made Thermal Oxidizers: Lessons learned

Posted by Steve Murray in Equipment - February 24, 2010

Purchasing and installing a thermal oxidizer is a common solution for manufacturing facilities that need to neutralize toxic air emissions. We recently installed a foreign-made thermal-oxidizer for a client and encountered several issues that we thought would be worthwhile to share with others considering a similar solution. Consider these as lessons learned from our experience.

Potential problems and considerations associated with importing foreign-made thermal oxidizers:

Delivery time and cost rises when importing any foreign-made equipment.
The manufacturer may have to send a team of engineers overseas to your site to complete the installation due to their knowledge of the piece of equipment - this can severaly impact your schedule.
The manufacturer may expect a list of installation requirements to have been completed by the time the thermal-oxidizer is delivered to the site.
The manufacturer will not accept responsibility if the installation can’t be performed because there is a lack of preparation on the client’s end or installation requirements haven’t been completed.
In some countries, the burning of liquid chemical waste changes the legal classification of the thermal oxidizer to a “hazardous waste incinerator.”
Replacement parts often have to be imported and may require the manufacturer’s assistance to be installed.
Keep in mind that the temperature and residence times required for thermal oxidizers can differ between countries based on emissions regulations.
You may need special permits for installation and startup, which can also delay your project schedule.

Relief Valves & Maintaining OSHA Regulations

Posted by Steve Freitas in Equipment - February 16, 2010

We’ve recently seen an uptick in the number of clients asking for support to complete the PSM (process safety management) documentation and calculations for relief valves. Although the reasons for the recent compliance efforts vary, we thought it would be worthwhile to review the regulations and requirements OHSA has established for process vessels.

OSHA’s concerns regarding vessels include:

Vessel Rupture:

Blast effects due to sudden expansion of the pressurized fluid
Fragmentation damage and injury, if vessel rupture occurs

Vessel Leakage:

Suffocation or poisoning, if the leakage occurs into a closed space
Fire and explosion from flammable liquids
Chemical and thermal burns from contact with process liquids

It is important to install relief valves capable of withstanding the given load placed on them by these vessels to avoid the above problems. Maintaining an exact blowdown is not optional. If these relief valves fail, serious injury and equipment damage may occur.

Below is a summary of OSHA’s requirements for vessels containing hazardous materials:

Identification & Documentation: Product identification (such as a relief valve) and where this particular product is being used - location, owner, serial number, manufacturer, date of manufacture and service date.

Design & Construction: Information that identifies the standard use or code for the design and construction of vessel/safety relief valves - fabrication, design code, construction type, requirements and inspection methods.

Service History: Identify operating history - fluids handling, type of service, changes in service conditions and overall history.

In-Service Inspections: Information that identifies inspections performed on the vessels that will assist in the safety assessment - type/extent/dates of inspections performed, examination methods, qualifications of personnel and results of inspections.

Specific Applications: Identify the type of operations that have a tendency to lead to damage, leakage or rupture - type of fluids used, awareness of information and procedures/guidelines.

Process Safety Information: Information pertaining to the hazards of the highly hazardous chemicals in the process including factors like toxicity information and reactivity data and other calculations that help evaluate the specific risks and characteristics of the particular vessel and process.

Evaluation of Information: Assessment of above criteria (identification & documentation, design & construction, service history, in-service inspections and specific applications) will reveal if the practice, operation and maintenance of these vessels and relief valves are all in accordance with OSHA industry guidelines and standards.

For the full text of OSHA’s Process safety management of highly hazardous chemicals please click here (http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=STANDARDS&p_id=9760).

Rhode Island Business Incentives, Part 2

Posted by Bob Hubert in General - January 27, 2010

SPEC has built several large manufacturing facilities for clients in Rhode Island, one of whom received a grant to locate their new facility in the ocean state.

Aspen Aerogels contacted SPEC to build their new facility in Rhode Island after receiving $5 million in government aid to build their $30 million facility. The employment opportunities that this project afforded the state, in combination with Aspen’s status as a green manufacturing company, awarded them other considerable financing and tax reductions as well.

SPEC’s other work in Rhode Island includes:

Creating a specialty coating manufacturing facility for Arkwright, 5,000 sq ft with a $4.7 million budget, including:

Complete design/build of facility up to performance specifications
Blast resistant/relief construction, Class I, div. I & II due to solvents used
Completing project on strict time schedule and according to budget

Finding a new location for DSM Neosol’s RI manufacturing plant and upgrading their entire polyurethane manufacturing operations, including:

Complete design/build of facility up to performance specifications
Assisting with relocation, building out office and laboratories at new location
Working with local authorities and environmental consultants to obtain permits

Rhode Island Business Incentives Explained, Part 1

Posted by Bob Hubert in General - January 13, 2010

Rhode Island currently offers a number of incentives for businesses to build manufacturing facilities in the state. Grants and tax breaks for certain types of businesses are available under the following building incentive plans:

Rhode Island Industrial Facilities Corporation

Gives un-taxed revenue bonds of up to $20 million to manufacturing businesses, primarily to green and high tech manufacturing businesses (renewable energy solutions, advanced materials, etc.)

Enterprise Zone Business Tax Credit

Companies located in the “enterprise zone” that build employment opportunities by 5% each year are eligible for state funding

Rhode Island Economic Development Corporation (RIEDC)

Supports a Renewable Energy Fund (REF) that this year has distributed $681,875 in grants to 17 local projects that will increase employment in green technology and green energy industries.
Offers companies that have been designated “Project Status” construction (new facilities approved by RIEDC, with company wages 5% above average) and companies that use state offered bond financing programs exemptions from sales tax on machinery, materials, equipment, and other supplies purchased for facility use.

Job Development Act

Businesses that can offer new employment opportunities for three years in a row are eligible for reductions in corporate income taxes, reductions persist as long as same number of jobs is maintained; amount of tax reduction proportional to number of jobs created.

Solar Powered Energy: Evolving Technology in Photovoltaics

Posted by Jennifer Savage in Clean Technology - January 06, 2010

First Generation, or Crystalline Silicon-

Crystalline silicon has historically been the favorite material for solar cells, even though it’s not a great light absorber, and it needs to be several hundred microns thick to work properly (which creates high materials costs). Crystalline silicon is not only expensive but also very delicate, so solar panels made of this material can’t endure rough handling or environments. It continues to be the predominant type of semiconductor in solar cells because there is a large amount of existing process manufacturing knowledge for this technology; plus, it is highly efficient.

Second Generation, or Thin Film-

These thin film technologies are better light absorbers and require only one micron or so of thickness, making them significantly less expensive than 1^st generation technology. They are also generally more resilient and weather-proof than crystalline silicon panels. Solar panels with thin solar cells use semiconductors made from amorphous silicon or other polycrystalline materials, such as cadmium telluride, copper indium, and diselenide. This technology, however, is newer and more complex than crystalline silicon (i.e. harder to manufacture because of the lack of existing technology and experience in manufacturing), so it’s still the secondary player in the solar cell industry.

Prism Solar, Konarka, Sunworks Solar, and Petra Solar are all solar cell companies that have received government/state funding for their development of advanced photovoltaic technologies for wide commercial and residential use. Konarka, a SPEC client, was awarded $5 million in funding for the development of their new photovoltaic manufacturing plant in New Bedford, MA.

Konarka's Solar Panel Technology-

Konarka is one of the many companies using thin, plastic materials as substrates for semiconductors, making solar panel technology affordable and (more readily) available for government, consumer, and commercial use. Their company frequently partners with manufacturing companies to integrate their solar cell technology into existing products, making products that are usually powered by stored energy, solar-powered.

For example, Konarka worked with Arch Aluminum and Glass Co., Inc. to develop the first solar panel installed in the wall of their facility in Tamarak, Florida. These solar panels will use sunlight as a source of clean energy to power their facility.

Konarka has also worked with a German company, Neuber, to produce “Energy Sun Bags,” a solar powered bag for charging electronics, using their lightweight, plastic photovoltaic technology.

SPEC Works with NY State Funded Start ups: Part 2

Posted by Jennifer Savage in General - December 16, 2009

With so much available funding from the state government, many businesses are now able to build new or retrofit existing facilities in New York State. For many small to mid-sized companies, these grants have allowed them to begin their first demonstration or commercial-scale building project. Determining the best course of action, however, can be a daunting task for these companies attempting to scale-up.

Some common pitfalls:

Failing to hire an engineering company that has all necessary disciplines in-house: Too often, companies have to hire more than one engineering firm to complete a project because most firms don’t have engineers versed in all disciplines. For new companies, having an all-inclusive engineering service keeps the design-build process organized, efficient, and cost effective.
Neglecting to hire a company that has performance, not just mechanical, completion written into the building contract: Young companies often don’t realize that their construction contract is for mechanical completion only (i.e. if the project is built according to the drawings but the process doesn’t work, it’s the client’s responsibility to fix it, not the contactors’). Building to performance completion ensures the final responsibility rests with contractor.
Not ordering long lead equipment and obtaining local permits in early project phases: The time it takes to complete these crucial tasks is typically under-estimated; failing to order long lead equipment early on and obtain local building permits can halt project progress, ultimately postponing project completion.

SPEC Process Engineering & Construction is a design/build firm that can help companies avoid these pitfalls.

SPEC specializes in working on projects that are companies’ first substantial scale up and understands the specific needs of these projects
SPEC’s design/build process can streamline the schedule by ordering long-lead equipment early, securing early permitting, etc.
SPEC is the single point of responsibility for the entire project: engineering, construction, and start-up
SPEC contracts to performance, not just mechanical completion

Projects Receiving State Funds Completed by SPEC:

SPEC was commissioned by a confidential client, initially, to provide process engineering guidance for a fermentation section of a pilot scale, cellulosic ethanol, R&D line. SPEC’s involvement soon expanded to include:

A full pilot-line design
Procurement, delivery, and installation of skid based plant modules
Purchase of long lead equipment to meet the client’s ambitious deadline
Successful supply all the utility systems and piping, final check out, and commissioning and start up of the facility

New York State Incentives Explained: Part 1

Posted by Jennifer Savage in General - December 10, 2009

New York State’s robust business incentive programs make it an ideal location for green manufacturing and industrial businesses, and recently has attracted some of the industry’s key players. Below is an outline of some of the Empire State’s incentives:

Manufacturing Assistance Program (MAP) provides:

Grants of up to one million dollars to manufacturers locating companies in the state that will employ fifty to one thousand employees

Requirements for MAP:

Transform materials through mechanical, chemical, or physical means into new, value-added products
Export 30% of their goods beyond their region
Use environmentally friendly processes

Overlapping requirements for companies benefitting from MAP and New York State’s Industrial Effectiveness Program (IEP) have further encouraged the growth of green technology in NY State industrial business. New York State is motivating these businesses to use green technology in order to receive a high level of funding.

IEP Funding provides:

50,000 dollars in government assistance to identify, develop, and implement improved management and production processes

The Empire Zone program has been another driving force of business growth, giving incentives to businesses located in these zones that will create new jobs or beneficial investments.

Benefits for zone certified companies include:

Tax credits for equipment mainly used in manufacturing, processing, assembly, industrial waste treatments, air pollution-control facilities, and R&D or financial institutions
A state sales tax refund for materials purchased and used in construction, expansion, or rehab of industrial or commercial properties
Reduced energy costs for new facilities

Mascoma is a prime example of how New York State programs have brought green, high tech facilities to the state. Mascoma creates cellulosic ethanol from non-food alternative energy sources from the material found in the cell walls of plant fiber.

Their feedstock is often considered a waste or by-product, consisting of woody substances such as switchgrass. This is a characteristic of all cellulosic ethanol that makes it an economically attractive fuel source. As a requisite of their large state grant, Mascoma must create ten to fifteen jobs over the next three years in high-paying, high tech positions.

Mascoma received extensive state grants to build this biorefinery, including:

Tax refunds under the Empire Zone plan
Capital from biotechnology state funding
$14.8 million in funding from the state budget allocated to the development of cellulosic ethanol-- this funding is part of a larger initiative promoting the development of high technology industries like biotechnology, which are expected to be a major source of economic revenue in years to come.

U.S Department of Energy Supports New Electric & Hybrid Car Technologies

Posted by Bob Hubert in Clean Technology - December 02, 2009

The U.S. Department of Energy (DOE), this summer, awarded 2.4 billion dollars in stimulus money from the American Recovery and Reinvestment Act to, “accelerate the manufacturing and deployment of the next generation of U.S. batteries and electric vehicles”. The goal of the stimulus money was to promote and support three initiatives

Sustain clean energy research
Secure the nation’s energy sources
Reduce the United States dependency on foreign oil

A123 Systems Awarded DOE Grant:

One of the award winners, who received the 2^nd largest grant of 249 million dollars, was A123 Systems headquartered in Watertown, MA. A123 Systems is working on a new class of Automotive Lithium Ion cells that deliver a new combination of power and safety, enabling design flexibility in transportation applications and vehicle platform electrification. The grant is a part of the DOE’s Electric Drive Vehicle Battery and Component Manufacturing Initiative, and will assist with A123‘s objective of building a world-class lithium ion battery manufacturing facility in the U.S.

A123’s Technology:

A123 Systems uses Nanophosphate chemistry to develop several electrode technologies. The M1 cells found in A123’s batteries provide, “high power with excellent durability. M1Ultra cells offer leading power to energy ratios and are optimized for HEV and Heavy Duty applications... M1HD cells are designed to deliver both high power and high energy density required for use in PHEV, ReEV and EV applications.”

Characteristics of Nanophosphates:

A magnitude smaller than conventional oxide-based phosphate materials
Proprietary doping of particles that results in significantly faster phase-change dynamics
A high rate capability (essential for high power systems)
Discharge rate of up to 100C

The batteries produced by A123 Systems allow for increased energy ratios, expanded longevity during application use, and increased cost effectiveness.

The Technology & Process behind Cellulosic Ethanol Production: Part 2

Posted by Jennifer Savage in Alternative Fuels - November 11, 2009

Qteros, a start-up from UMass Amherst is on the forefront of the cellulosic ethanol industry. Their mission is to develop efficient and cost effective ways to make ethanol from waste products, and they have already broken ground on their demonstration scale facility. Qteros success comes, not only from their Q microbe (see Qteros website for detailed explanation as to how this process works), but also from their growth plan that allowed them to scale up production at progressively higher levels, while accurately predicting their costs.

The Technology Behind Cellulosic Ethanol:

Qteros’ primary focus when it comes to cellulosic ethanol production is on the Q Microbe, a super-bug microorganism that consumes plant and tree waste and converts these waste products into clean transportation fuel relatively simply. Traditional approaches to cellulosic biomass require intensive pretreatments using enzymes that break down the biomass into simple sugars. These enzymes and pretreatment are the largest cost contributor to cellulosic ethanol production. The Q Microbe, however, breaks down a wide variety of plant materials including corn residues, cane bagasse, woody biomass and cellulose waste, and produces ethanol from its own enzymes. This process reduces overall process time, saves money in pretreatment and eliminates the need to produce ethanol from essential food resources.

How SPEC Helped Qteros Scale Up Production:

Designed scale up from laboratory bench scale to pilot process
Created equipment ordering process parallel to laboratory development/design
Continuously revised floor plans to meet projected requirements for Qteros new program and facility
Helped vet potential buildings to evaluate what would be the best fit for their unique requirements

To receive a more detailed overview of the project visit: http://www.spec-eng.com/projects/qteros.php

Will Cellulosic Ethanol Replace Gasoline? Part I: The Facts

Posted by Jennifer Savage in Alternative Fuels - November 09, 2009

Recent reports from Sandia National Laboratories and General Motors have estimated that by 2030, alternative energy and biofuels in the U.S will replace one-third of annual gasoline consumption. One of the clean technology forerunners contributing to this reduction is cellulosic ethanol. Cellulosic ethanol is already being produced on a commercial scale by several companies across the U.S. and is already commercially viable:

Benefits of Cellulosic Ethanol:

Fewer steps used to break down waste product means more conversion potential for fermentable components
No impact on essential food resources (unlike corn-based ethanol production)
Produced from agricultural waste products/non-food sources (switchgrass and wood chips)
Reduction in air pollution (traditional gas production can radiate roughly 75-80% more CO2 emissions)
Reduction in green house gases (traditional reformulated gas production can emit roughly 80% more green house gases)
Reduction in fine particle emissions (traditional gasoline production can discharge roughly 50% more fine particle emissions)

Part II: We'll outline an up and coming cellulosic ethanol producer, Qteros, and why their technology is making cellulosic ethanol an attractive fuel alternative.

SPEC Process Engineering: Thoughts on a Better Project Approach

Posted by Jennifer Savage in General - November 06, 2009

If you’ve been in the industrial or facilities side of the world for a while, you’re probably familiar with the headache that starts about the time you find out you have an expansion or maintenance project coming up. You don’t have time to make sure the engineers and architect coordinate their work or to babysit the subcontractors while they’re working on site. More frustrating is that even if you wanted to hire someone to manage your project, most of the big industry players wouldn’t look twice at your “small” (read: under $20 million) project.

All that being said, it doesn’t mean engineers haven’t figured out ways to solve some of these problems. Based on the experiences of engineers and clients, the following ideas have emerged as good rules of thumb for managing your process engineering project.

Find an engineering firm that has your project’s key disciplines in-house, including mechanical, electrical, controls, and process engineering. Some firms even have an architecture department that specializes in damage limiting and industrial construction.
Make sure your contract designates a single point of responsibility for ALL areas of a project, all the way from design, permitting, procurement, construction, to start up. This helps ensure you’re not left holding the bag with subcontractors, etc. after the job is finished.
You can often “expedite” a project by using preliminary design drawings to specify and order long lead equipment, start early permitting, and work with local authorities to ensure there are no surprises down the road, all before the final construction drawing set is complete.
Use a firm that employs their own site superintendents and site engineers who can work with the subcontractors to make sure equipment is handled and installed correctly and who can work out any design issues as they occur.
Write your contract to include performance, rather than mechanical completion; this will ensure that your plant is running according to your specifications by the time the job is complete.

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Steve Freitas on a long term client

Posted by Jennifer Savage in Engineer Interviews - October 28, 2008

“We just want you to provide a P&ID for our new process. Please provide accompanying line sizing and pipe specifications. Also, please provide instrumentation specifications and purchasing for all automated instruments, as well as updated programming and control system modifications. We will take care of equipment purchasing, as well as the piping and electrical contracts.”-Waters Corporation, a long term client.

More often than not, multiple smaller projects take the forefront at your facility on a year-to-year basis. Some of these your staff can probably handle on their own. And if you’re like most manufacturers, you typically have to handle the normal production duties while juggling new capital projects and improvements. Your budget may be strained as well. This is when some companies choose to divide the scope and responsibility where it makes sense to bring in an outside firm like SPEC.

Many of our projects with Waters Corporation are like the one described above. Although, SPEC specializes in design/build services, we are more than willing to provide a portion of the services “a la carte” if the situation seems appropriate. Since 2002, SPEC has helped Waters with new single reactor systems, utility upgrades, control system improvements, instrumentation upgrades, and updating plant documentation to meet OSHA Process Safety Management (PSM) regulations, all in partial engineering and/or construction roles suited to support the budget or technical needs of Waters personnel.

In addition to the many smaller projects, SPEC has also provided services for large turnkey projects, including:

A new, two story 9,000 ft² building addition creating a separate powder handling and manufacturing process suite.
Installation of a regenerative thermal oxidizer (RTO) system upgrading the facility to zero emissions.
Installation of new stainless steel process reactors and filter presses, designed for 3x scale up of an existing manufacturing line. Upgrade of the existing manual process providing semi-automatic functions through DCS control.

HVAC System Design in Pre-existing Spaces

Posted by George Roberts in HVAC - October 15, 2008

Designing an HVAC system to meet the requirements of a Class 1000/Class 100 pharmaceutical manufacturing clean room is not a simple task under the best circumstances. I was asked to design this system for a clean room that was being converted from existing building space and therefore had ceiling space that was already congested with ductwork and piping that served other areas of the building.

I addressed this issue by completing detailed field documentation beforehand. This allowed me to then design new ductwork that would fit in the existing space with all the existing ductwork and piping.

DCS Selection, Distributed Control Systems

Posted by Steve Landau in Controls & Instrumentation - September 24, 2008

Why would you choose one brand/model of DCS over another. At SPEC we have used, (for various reasons)

Emerson DeltaV, with and without S88 Batch
ABB 800XA, batch
Siemens PCS7, non-batch

(All the flagship products of leading companies)

They each have their advantages and disadvantages:

Price -

Due to the competitive nature of the industry, pricing varies widely. In the last project we bid, ~ 120 I/O points with 2 workstations. The budget pricing was $18,000 for PCS7 and $25,000 for DeltaV. (without I/O).

This may look like a big difference, but when a good configuration engineer cost 4K to 6K per week, the ease of use and speed of configuration becomes significantly more important than the initial cost of hardware and software licenses.

Ease of Use for Configuration Engineer-

By far, DeltaV is the easiest system to configure. There are fewer options, fewer menus and check boxes. One of the best features, is the control module templates.

A control module is a pre-set subroutine which is configured for a specific function. Examples of control modules:

Analog Input with scaling, alarming, and trending (historical collection)
Digital Input with alarming, latching, logging, and time delay.
PID Loop

With the control module setup, and engineer can setup a typical analog input point, define ranges, alarm levels, and historical collection (example: every 10 seconds).

Then whenever a new AI is required, this is dragged out of the library, just change name, assign I/O, reset alarm limits and you are done.

ABB has similar functions, and can even can wrap together the control code with the associated graphic object, but it is more difficult to do.

Siemens PCS7 has control module library, but CM’s are copy/paste, and not instantiated. To learn more about this “instantiation” see: http://www.specsoft-pfs.com/Brewery%20Automation%20Model.pdf

Ease of Use for Client-

As with ease for a configuration engineer, DeltaV has the fewest options and simplest menus. For a refinery, or very large plant with sophisticated operators, it probably won’t make a difference. SPEC sometimes installs the first control system a client has in their plant.

Choosing Used vs. New Process Equipment, Part 2

Posted by Steve Freitas in Equipment - September 09, 2008

To help you determine if used equipment is right for your budget and process, here are some important items which need to be considered.

1. How important is the equipment to your process?

For example, if you are planning a biofuel manufacturing facility and the key component to the process is the fermentation vessel, purchasing a used pressure vessel and mixer may not be wise, especially if you are not planning on modifying the equipment but are installing it as is. It will be hard to find the exact component on the used market to suit your process needs and it may not work to your satisfaction.

2. Warranty - Most used equipment comes without any warranty.

The fact that it is used makes it more likely that it can and will breakdown. If you do not have a well trained maintenance staff on hand, it may be difficult to make these repairs quickly without factory assistance. Again, if the equipment is important or the heart of your process this can lead to extended downtime, additional costs and loss of revenue.

3. ASME stamped pressure vessels - It will be hard to find the exact vessel to meet your process needs.

More than likely you will need to add or change the nozzles on the vessel meaning you will need to make certified ASME vessel repairs. This will certainly add cost and time to the project and could uncover hidden problems with the equipment (see comments in table from part 1).

4. Process vessels with mixers - The mixer needs to be the right type and horsepower to suit your process.

Because the mixer is a key piece of mechanical equipment, you may want to consider factory refurbishment. Mixer refurbishment can run from $3,000 to $17,000. If you replace or modify the power of the mixer on an ASME vessel, the nozzle loads on the vessel must be addressed as well.

Danvers, MA Explosion, Ventilation Analysis

Posted by in HVAC - September 05, 2008

The large explosion that occurred at the Danvers, MA, CAI, Inc. manufacturing facility in November of 2006 was investigated by the US Chemical Safety and Hazard Investigation Board. Several key issues were highlighted in the investigation report (2007-03-I-MA), one of them being the safe handling of flammable liquids.

Section 5 of the report refers to the Model Fire Codes, including NFPA 30 for Flammable and Combustible Liquids. This report states that “This code allows for flammable liquids in unsealed containers to be heated indoors as long as adequate exhaust ventilation is provided to prevent flammable vapor accumulation within the building.”

Although SPEC agrees with the above statement, as the explosion clearly shows, proper design of a facility is necessary to effectively coordinate “adequate” ventilation with standby power and electrical area classification. Ventilation design needs to account for several factors:

· Air change rates or cfm/sq ft

· Dead zones within the space

· High and low exhaust locations

· Pressure differentials between rooms of different uses to avoid vapor flow to unclassified areas

One approach that SPEC has used in the past is to install LEL monitors in the exhaust ducts to detect high concentrations of explosive vapor. Based on the specific requirements, the high LEL can trip a fire alarm, increase air flow to make the area safe, automatically cut power to any electrical devices in the room or all of the above.

Although the Board concluded that CAI was a grandfathered facility and did not need to apply NFPA, a walk-through of the facility by a trained HVAC/Mechanical Engineer would have quickly revealed that simple changes to the ventilation system could have prevented the explosion.

What you should expect from your equipment /instrument vendor

Posted by Steve Landau in Equipment - September 04, 2008

At SPEC process engineering we buy a lot of parts, pieces and specialty equipment.

Over the years we have found some reps/distributors to provide not only good prices, but also thorough documentation.

A high quality vendor should be able to provide the following WITH QUOTE:

1. Cut Sheet, in PDF format

2. Autocad Drawing of Equipment

3. Link to Website with Full instruction manual

4. Price with actual delivery (not “standard quoted delivery”).

5. Price with Delivery, Full model number.

All in an easy to read format. No scans. We like to directly cut text from the PDF quote and paste it directly into our purchase order system.

With the documents listed above, almost all of our turnover documents are supplied with the quote. We don’t have to chase down the manuals and scan them later.

Does your vendor provide this type of documentation to you with a quote?

If not, find another vendor. The few $ you may save on the purchase will easily be eaten up by engineering time to collect the documents for validation and turnover.

If you would like a referral to our favorite vendors, just drop us a note.

Choosing Used vs. New Process Equipment, Part 1

Posted by Steve Freitas in Equipment - September 04, 2008

What, if any, is the real benefit of buying used equipment for your project? Many people believe that they can save money by buying used equipment for their capital projects, and depending on the age and condition of the equipment they can save between 50% and 75% of the original cost.

However, sometimes used equipment can cost the same or even more than new after repairs, modifications, etc. are made to have the equipment function properly. And there are often a lot of hidden costs.

The following table contains real information from a project in which used equipment was bought to save money on a project.

	USED 1,000 gal. Tank w/ Mixer 316L SS (30 to 50 psig) jacketed	USED 2,000 gal. Tank w/ Mixer 316L SS (30 to 50 psig) jacketed	NEW 1,500 gallon Tank w/ Mixer 304L SS (50 psig/FV) jacketed	Comments
Base Cost	$ 8,500.00	$ 32,500.00	$ 52,379.00
Agitator Repair/Mods	$ 14,802.00	$ 9,515.00		Replace motor (XP), replace seal, refurbish drive, replace housing on 1 (Both 15 HP)
Vessel Repair/Mods	$ 13,080.00	$ 12,450.00		New nozzles to suit process, fix previous repairs not ASME certified, recertify, modify supports for load cells/platform
Other	$ 4,200.00			1,000 gal. jacket filled with debris (bees nests and dirt). Cost to hire professional cleaning company. Does not include time spent by Site and Mechanical Contractors
Totals	$ 40,582.00	$ 54,465.00	$ 52,379.00

As you can see, the 1,000 gallon vessel with mixer was purchased at a low cost of only $8,500 but the additional costs at the end of the project added up to over $32,000, for a total cost of approximately $40,000. More importantly, the used 2,000 gallon vessel with mixer, after repairs and modifications, actually cost more than the new 1,500 gallon vessel with mixer. The key when considering used equipment is to make sure you understand the extent of the repairs and modifications that will need to be made, as well as the possibility of other unforeseen, additional costs that could significantly impact your budget.

New Blog Launched for SPEC Process Engineering & Construction

Posted by Jennifer Savage in General - September 04, 2008

SPEC Process Engineering & Construction would like to announce the launch of our new blog. Contributors will include all of SPEC's engineers from disciplines including process, mechanical, chemical, electrical, and controls. Topics will include useful tips as well as solutions and lessons learned from specific projects. We hope that our wide range of experiences will provide a helpful resource to our readers and we look forward to your comments and questions.

SPEC Process Engineering & Construction