A lesson in lemonade: create EPC business opportunity from emerging sustainability & efficiency targets

Posted: June 29, 2021

You know what they say… when life gives you lemons, make lemonade. And, if you stay with the analogy, I’m sure you’ll agree – from navigating labor shortages and historically low margins, massive M&A activity, and ever-increasing project complexity (heightened by pandemic) – Engineering, Procurement and Construction (EPC) companies have had their fair share of the tart, refreshing drink over the years.

Now, emerging sustainability regulations such as the International Marine Organization’s IMO 2020 ruling and oil and gas’ Net Zero 2050 targets mean that plants must not only be executed on-time and on-budget with minimal risk, but also with the lowest possible carbon impact. At the end of the project, plants also need to operate with the same standards.

Tomorrow’s plants will not only be efficient and sustainable, they’ll also be connected and collaborative, with systems in place that can easily be modernized as the demands of the market change.

Future Plant Imperatives: Digital Twin & Sustainability

Owner Operators in process plant industries are shifting strategies rapidly to balance efficiency and sustainability to remain competitive and attract future investment. This bilateral imperative leaves project managers and engineering leaders at EPC companies with little choice: innovate to deliver successful projects with low carbon footprint, or lose to competitors who do.

Sustainability does not, and cannot, come at the expense of efficiency. In fact, the two are related. The same Digital Twin insights which drive efficiency can be looked at differently to measure carbon impacts caused by suboptimal material, shipping, and business processes (such as energy consumption). A gain in plant efficiency often equates to a reduction in impact, but first, you must have the systems in place to track metrics for both.

Digital engineering, behavioral (process), and historic (operations) information, when integrated in the form of a Digital Twin, deliver benchmarks and actionable insights throughout the asset lifecycle. There is no limit on the ways these insights can and will be used, but benefits to both efficiency and sustainability goals can be realized simultaneously, from the same dataset in different context.

Addressing the Elephant in the Room: The EPCs ROI of Digitalization

You may ask: “It’s true, to be hired on plants in the future, EPCs know they must be able to demonstrate There are no sources in the current document. the ability to deliver efficient, sustainable, digitally connected projects and plants… but our margins are already stretched to near breaking point – how can we add another layer of complexity and survive?”

Handover of a complete Digital Twin is becoming an owner operator mandate at the end of many projects, but it could also be the missing link to building EPC resiliency. With a data-centric engineering approach on the cloud, EPCs can streamline collaboration amongst global project stakeholders with trusted project data to reduce inefficiencies, waste, and even travel for meetings. This translates to minimized schedule delays and project savings which can be reinvested in more sustainability initiatives, leveraged by the EPC to boost margins, or shared with the owner to improve project feasibility and chance of hire.

Developing the Digital Twin in the project phase also provides real-time project transparency for clients, eliminating the need for cumbersome project updates. It can also be easily transmitted at the end of the project to empower operational systems resulting in delighted clients and a higher likelihood for future re-hire.

Innovative EPC companies have uncovered new revenue streams from the digitalization of capital projects. Digital Twins as a Service offerings maintain the data integrity and the EPC stays engaged to identify opportunities to expand the use of the digital twin in operations. This provides further enhanced client value, while also extending EPC involvement well beyond the traditional project endpoint to generate recurring revenue that reinforces business resiliency.

Unique Projects, Flexible Solutions

Like people, every project is unique.

New plants, such as the ExxonMobil USD 100 billion carbon capture facility proposed recently, will be engineered and executed digitally. This digital process will naturally begin contribution of the engineering and project information needed to form the Digital Twin starting at the onset of the project. All engineering disciplines, across geographic locations and corporate firewalls, will work on shared platforms on the cloud to eliminate siloed working, improve transparency and achieve maximum engineering efficiency all while seamlessly contributing to a Digital Twin that matures alongside the project.

Brownfield revamp projects – where updates are made to old assets – are growing in popularity to modernize operational assets without significant capital investment or massive business risk. Use of digital twin technology on legacy operational plants allows connected workers to familiarize themselves with existing installations and enables them to try out various solutions before undertaking modifications or repairs.

Now, as existing facilities around the world respond to emerging regulatory requirements and changing market needs such as the increased demand for blue/green hydrogen, electrification, and carbon capture facilities, revamp projects will continue to rise. To capitalize on this market opportunity and deliver Digital Twin value to clients, EPCs must become well-versed in brownfield data-remediation to create a representation of the asset’s as-is physical form and its historical data (process / behavioral data) which can then be used to inform decisions on plant process changes, revamp projects, and even decommissioning.

Turning challenge into opportunity

Whether you consider the impending changes as yet another basket of lemons thrown at the battered EPC industry or a prime opportunity for a digitally lagging industry to step into a brighter future – digital transformation is the tall glass of lemonade that we all need to get us there.

Tomorrow’s plants will be a combination of net-new facilities and modernized versions of those operational for many years already. No matter how they came to be, all future plants will require collaborative, digital processes and cultures that can be easily modernized over time as the entire industry navigates the long-term energy transition.

If EPCs master digital transformation of capital project delivery, they will achieve greater business resilience by enabling more feasible capital investments, higher margins, and increased trust, all while helping their Owner Operator clients meet the mounting future plant imperatives and being good stewards of the planet.

To discover more on how to meet the digital and sustainability imperatives of plants in the future, explore the Engineering the Plant of the Future webpage.

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