PERCEPTIONS ON PROJECT DEVELOPMENT
We are in a time of dramatic change
The past decade saw the development of a very successful corn to ethanol model that has served many communities and investors very well. While that model remains viable, it has become very difficult to attract the necessary investment capital and project financing for ethanol projects without a unique business plan or new technologies.
There are several factors that will change the profile of the next generation of biofuels plants.
• Negative public perception resulting from the “Food vs. Fuel” controversy have given corn/ethanol plants a bad image regardless of continued profitability.
• Cellulosic derived ethanol has become the favored vehicle for investors.
• New technologies for fractionation, syngas, biomass combustion, Co-generation, new co-products and mixed feedstocks will be need to be incorporated into new projects to attract financing.
Every project is unique
There are some basic rules that apply to every new project but every project is different and unique and must define its own strategy. Following the rules developed from the experience of previous projects will provide savings in time and resources, yet an individual project strategy must be developed to maximize the assets and resources available.
Creative thinking is essential
The biofuels industry is still very young and without a blueprint proven over time. Many ideas are still unproven and markets and technologies are still evolving. It is extremely rare for one individual to have a monopoly on all the best ideas and a singular vision on the path forward. The value of a project team, all participating in an open dialogue of ideas and opinions can be of great value.
Projects must have a well-thought-out development plan
A written plan that includes the eventual objective, the project timeline, a development budget and a list of preferred partners must be developed and followed. When deviations are necessary, changes can be made. The discipline resulting from working within a plan of action will beneficial throughout the development, construction and operational phases.
All participants must be a part of the team
All founders, partners, investors, board members, contractors and vendors should have a designated role in the project development. All participants should have something to contribute and be provided an opportunity to make that contribution.
Communication is critical to success
Secrecy and poor communication lead to a lack of trust, missed timelines, wasted resources, a negative image, false rumors and can contribute to project failure.