Aspen Integrated Modeling and Economics White Paper

2013 Aspen Technology, Inc.
AspenTech
, aspenONE
, the Aspen leaf logo, the aspenONE logo, and OPTIMIZE are trademarks of Aspen Technology, Inc. All rights reserved. 11-3457-0913
Improving and Optimizing Conceptual Designs:
Why Integrated Modeling and Economics Achieves
Better Processes
An Industry White Paper
By Ron Beck, Product Marketing Manager, Aspen Technology, Inc.
Integrated Modeling and Economics
2013 Aspen Technology, Inc. AspenTech
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Executive Summary
At the earliest conceptual design stages, business pressures are increasing. Now more than ever before, process engineers
are expected to deliver optimized designs that factor in capital costs, operating costs, energy usage, emissions, and capacity.
This presents a formidable challenge to conceptual design and R&D organizations due to the inaccessibility of estimators
and equipment design experts at these early stages of design. The workflows imposed by the traditional use of simulation
and design tools exacerbate this problem by promoting sequential work processes, time delays, and re-keying of process data.
AspenTech has introduced an innovative, integrated workflow between its process simulation, economic evaluation, and
heat exchanger design tools that completely re-thinks the conceptual engineering workflow, promoting the combined use
of consistent cost information and rigorous process simulation during conceptual design, thus optimizing process designs
and scopes, as well as enabling consideration of many more process alternatives. EPCs
1
, licensors
2
, and owner-operators
have reported that use of this integrated suite of tools reduces cycle time in proposal and conceptual design stages by 30
to 80% and, more importantly, increases the number of possible alternatives to be considered by five- to ten-fold, with
greater accuracy. This leads to optimized designs that effectively balance operating costs versus capital costs for better
overall project economics and ROI.
Introduction
Chemical engineering organizations have long
faced the challenge of anticipating the installed
capital and operating cost impact of alternative
process design scenarios
3
. The pressure to do so is
increasing as decisions around capital investment
become more business critical and are being
pushed further forward in the front-end design
process. As experienced estimators continue to be
in very short supply, the ability to implement and
support consistent, relative costing work practices
during early conceptual engineering offers a
competitive advantage. Making cost information
available early in the design process is important
because the ability to influence the overall cost of an asset decreases rapidly as the design work progresses (see Figure 1).
The challenge has been simply stated by Marcel Eijkenboom of Maturus Optimi as follows: Selection of the best project
alternative or option is qualitatively poor and takes too much time. The challenge is to improve the quality of project
selection and shorten the time to project execution significantly.
4
Integrating simulation and costing. This white paper describes how the conceptual design team can review a broader
range of candidate project designs earlier in the design process, utilizing work practices that integrate relative costing and
rigorous simulation to efficiently and consistently compare design alternatives.
The traditional conceptual design workflow forces process selections to be made with very incomplete economics. The
cost to build and operate a plant often has a non-intuitive relationship with the equipment selected and design
Cost
Estimate
Project Duration 100%
C
o
s
t

I
n
f
l
u
e
n
c
e
100%
0%
Figure 1. Cost Influence vs. Project Duration
1
Lofton, Waymon (2010). [Fluor] Improved Estimating Workflows. aspenONE Global Conference, Boston
2
Hatori, Shin (2008) [JSR]. Licensor Workflow Using AES Suite. AspenTech Japan User Conference, Tokyo
3
Koolen, J.L.A (2001) [Dow]. Design of Simple and Robust Process Plants. Wiley-VCH, Weinhem
4
Eijkenboom, Marcel and Crnomarkovic, Mladen (2010). [DSM] aspenONE Global Conference, Boston
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parameters, and, consequently, the optimal process options are often completely missed when following the traditional
approach. Also, the tradeoffs that decision makers wish to consider at early stages of design are becoming increasingly
more complex. Integrated modeling and economics enables the examination of more alternatives in the time available, as
well as the discovery of non-intuitive optimum solutions.
Simulation models have increased in power, sophistication, and speed of delivery, enabling the consideration of a wider
range of alternatives in developing a process design. However, these models typically do not focus on achieving an
accurate indication of the cost to design, construct, and operate. Meanwhile, estimators employ their own increasingly
sophisticated software
systems to produce
conceptual estimates for
process designs.
However, the estimating
discipline and process
discipline are quite
segregated in most
organizations, and often
there is neither the time
nor the resources to
engage estimators during
the initial conceptual
process design phase of a
project. This has led to a
number of well-
documented instances
where the best economic
business solution was not selected because the tradeoffs between capital expenses vs. operating expenses, yield vs.
energy consumption, and safety envelopes could not all be taken into account early enough in the project cycle.
Incorporating a relative estimate. The solution to this problem is to, in a sense, "mask" the complexity of the
modeling-based cost estimation and energy analysis and embed these functionalities in the simulation software, resulting
in a smooth and integrated workflow that enables development of capital and operating cost estimates in conjunction with
simulation models. To achieve this, several logical steps need to occur within the software, in which target equipment
selections are made based on the process modeling functional block elements. AspenTech has devised an approach,
called "Activated Economics", to this that allows the process engineer to arrive at whats called a relative estimate
without intervention of the estimating discipline (see Figure 2).
This relative estimate is sufficient, at the conceptual design stage, to conduct an informed analysis of technology,
performance, energy use, environmental compliance, and capital and operating costs Then select the best design based
on particular decision criteria.
As a part of this new activated workflow, AspenTech has also put energy analysis (Activated Energy) and heat
exchanger design tools to the process engineers fingertips. Activated Energy (powered by Aspen Energy Analyzer)
provides process improvement suggestions by performing pinch analysis with minimal input or expertise required.
Providing the process engineer with three options of how to improve the energy efficiency of the process and the
Figure 2. Embedding the relative cost estimating in simulation software provides a head start in
determining the projects capital and operating costs.
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economic impact of those options.
After performing an initial energy optimization, the process engineer can then integrate rigorous heat exchanger designs
using Aspen Exchanger Design & Ratingwithout leaving the process simulation environment of Aspen Plus or Aspen
HYSYS. Rigorous heat exchanger models provide greater insight into the cost to fabricate each exchanger and increase the
scope of the project in the early design phase. This integration is crucial, as heat exchangers account for up to 30% of the
CAPEX required in process designs.
Transferring the estimate basis along
the workflow. When a more accurate,
calibrated estimate is required, the
engineering information created during
the relative costing exercise can be
automatically loaded into the
estimators software system to further
define the estimate in terms of the
projects costing basis, cost indexing,
and escalation assumptions.
Traditional Workflow
The conventional workflow during the conceptual design activities of the process engineering group involves several
different groups and inter-group handoffs of information (see Figure 3). Conventionally, to achieve a realistic capital cost
estimate for a process design, the design must be handed over to the estimating discipline for evaluation. But because
process engineers do not want to waste the time of the estimators, they will often wait until they have arrived at a design
that is close to final, severely limiting the possibility of any additional design iterations at this stage. In turn, this means
that the decisions that lead to the final design happen in the absence of reliable capital estimates. If the process designer
wants to use a placeholder for costs, he often uses a proxy for costs in the form of a very rough factor-type approach,
which is notoriously inaccurate.
Another issue that arises is when or how to include reasonable estimates for heat exchanger equipment. Heat exchanger
costs are often dominant factors in the overall cost and scope of a process. To perform the conceptual heat exchange
design and selection, the mechanical designers, or a heat transfer specialist within process design, must be involved in the
workflow in order to specify that part of the design.
As a net result of these considerations, the traditional workflow involves at least five handoff steps (from conceptual
design to equipment design; back from equipment design to conceptual design; next from conceptual design to
estimating, and finally back from estimating to conceptual design), each of which requires successful communication and
handoff of information, and necessarily imposes time delays waiting for the next group to be available to work on the
specific design problem.
The consequence is that one cycle of incorporating costing and equipment design into a process modeling study takes an
average of one to three weeks and consumes specialized resources. Therefore, only a small number of process design
scenarios can be evaluated using the traditional conceptual workflow, and a less-than-optimal design and scope may wind
up being chosen due to the limited choices that can be investigated in the required timeframe. The most common practical
consequence is significant over-design with unnecessary scope and cost designed into the project. In some cases, an
otherwise worthy project may be erroneously deemed economically unviable, resulting in a lost business opportunity.
10 Days for Base Case Design
Cost
Estimator
Relative
Cost
Estimate
Equipment
Designer
Sized
Equipment
List
Process
Engineer
Conceptual
Design
Process Cost Equipment
Figure 3. Traditional workflow is manual, iterative, and inefficient.
Integrated Workflow
Why do engineering workflows exist? The fundamental reasons are to:
Ensure that the right expertise and knowledge is applied to each part of a design problem
Ensure that the correct project information is handed to the expert so that he works on the right problem
Make sure that well-established engineering principles are followed so that quality, safety, economics, and
functionality are all designed correctly, and that the organization as a whole reviews, checks, and approves
designs against this criteria
Maximize availability of the right information at the earliest beneficial time in the design
Business processes require review and change when the processes themselves interfere with the ability of the
organization to perform its collective function well and to thrive. In todays competitive and economically challenging
environment, engineering and development groups are under constant pressure to work faster and produce results with
fewer resources. The workflows, as traditionally managed, present a barrier to achieving fast-track results and impede an
organizations ability to optimize a design across multiple constraints.
To change the way process designs are developed, AspenTech leverages its full portfolio of engineering solutions, which
includes process modeling, economic evaluation, energy analysis, and exchanger design and rating tools. Drawing from an
in-depth understanding of the architecture, inputs, outputs, and customer usage of these tools, AspenTech has mapped
out an innovative, integrated approach to efficiently use the applications collectively. AspenTech consulted extensively
with several leading design companies that have identified and analyzed the barriers within their organizations. In
particular, organizations such as The Dow Chemical Company
5
, Fluor, DSM, BP, and others have provided insight as to
how their current work processes function and how technical and business performance could increase through
workflow improvement.
With the benefit of that work process
information and analysis, AspenTech has
designed and implemented an integrated
set of capabilities, all accessible from
within the process engineers familiar
environment, namely the process modeling
tools (see Figure 4).
Figure 4. Integrated workflow incorporates costing and equipment design within the
process engineers work environment.
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With Activated Energy, the process
engineer can perform pinch analysis
without leaving the simulation
environment in Aspen Plus or Aspen
HYSYS. Powered by Aspen Energy
Analyzer, Activated Energy allows for
analysis of actual heating and cooling
utilities against targets with minimal
input making it easier to reduce excess
energy usage for a more profitable,
eco-friendly design.
After an initial analysis of the energy
efficiency of the process, the process
engineer can then increase the flow
sheet fidelity by converting simple end point heat exchangers to rigorous designs. With rigorous designs, the engineer can
optimize process conditions while being conscious of the limitations of the equipment, including vibration limitations,
maximum pressure drop, maximum temperature, and other key variables. Rigorous designs are also a good starting point
for future thermal design analysis.
Using rigorous heat exchanger models in flow sheet increases the usefulness of the relative estimates provided by
Activated Economics. Heat exchangers account for up to 30% of the capital costs in chemical plants; therefore,
incorporating these costs in the relative estimate is crucial to informed decision making when comparing process
alternatives in Aspen Plus & Aspen HYSYS.
All of these features are seamlessly integrated into Aspen Plus & Aspen HYSYS and the resulting benefits of this
integrated workflow are a reduction in time to incorporate costing into preliminary designs, an increase in the number of
process alternatives evaluated in the same timeframe, and the ability to explore a broader range of alternatives to identify
the optimal design and scope.
The Enabling Tools
Process Simulators (Aspen Plus, Aspen HYSYS). Aspen Plus, widely used to model chemical processes, and Aspen
HYSYS, widely used to model hydrocarbon and oil and gas processes, are among the leading process simulation tools in
the industry today. These tools are also relied on heavily in the chemical engineering curriculums at some of the worlds
leading colleges and universities. Process simulators are used in the initial design of processes to help optimize yield,
minimize energy use, reduce emissions, debottleneck and understand plant performance, and provide decision support for
operations. Flowsheet models generate heat and material balances, stream summaries, and process unit information,
which together are used to understand and help predict operating efficiency, yield, and some elements of operating costs.
These basic outputs provide the design data that can be used by economic models to estimate the cost of a design.
5
Pauls, Jeff (2010). [Dow] Importance of Economic Analysis During Conceptual Design. aspenONE Global Conference, Boston
6
Whiteside, James (2005). [ConocoPhillips] Increasing Project Performance Using Aspen Kbase. AspenTech Worldwide User Meeting, Houston
Figure 4.5: The Activated Analysis Dashboard displays key factors that impact
design decisions including greenhouse gas emissions, energy efficiency, and capital
& operating expenses.
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Activated Economics is a cost evaluation software system designed to be used in the conceptual design phase of a
project from within Aspen Plus or Aspen HYSYS. Activated Economics utilizes the identical cost modeling engine (known
widely as the Aspen Icarus
engine) of three other software products, Aspen Capital Cost Estimator (ACCE, formerly
called Aspen Kbase
), Aspen Process Economic Analyzer (APEA, formerly called Aspen Icarus Process Evaluator), and
Aspen In-Plant Cost Estimator (formerly called Aspen Icarus
Project Manager). The system employs internal cost

models for equipment, which assign scope to an item based on engineering models derived from extensive engineering
experience. This scope includes bulks, civil, electrical, instrumentation, and utility, all based on a modeling concept in
which P&ID elements are built for each item. This approach has been proven to arrive at much more accurate costs than
the legacy estimating approach, namely factor-based estimating. This makes Activated Economics an ideal tool for
process engineers to quickly evaluate the relative economics of different design options without leaving the process
simulation environment.
Integration Between Simulation and Costing. The innovative integration between the simulation models and the cost
evaluation software is achieved through several mechanisms. First, there is a mapping paradigm, which maps heat and
material balance and stream information in the simulator to equipment items in the Activated Economics estimate.
Second, there is a grid interface in the simulator as a part of Activated Economics that makes it easy to review and edit
equipment definitions, such as material of construction, size, and design parameters. Third, the Activated Economics
interface menu bar within the simulator that invokes the economic engineering software and guides the process engineer
through the cost evaluation workflow. This system enables process engineers to quickly evaluate relative capital and
operating costs from within Aspen Plus or Aspen HYSYS. The high-fidelity cost estimates provide a better basis for
decision making during conceptual design.
Aspen EDR Suite. The Aspen Exchanger Design and Rating (EDR) suite of products (formerly called the Aspen HTFS
products) is used to design and rate several types of heat exchangers. From Aspen Plus or Aspen HYSYS, the modeler can
invoke the EDR suite, which uses the information from the process model to select a preliminary optimized heat exchanger
design.
7
Sijbesma, Feike, (2010). [DSM] DSM: Staying the Course. DSM Annual General Meeting, Heerlen, NL
8
Eijkenboom, Marcel and Crnomarkovic, Mladen (2010). [DSM] aspenONE Global Conference, Boston
0
200
400
600
800
1000
2006 2007 2008 2009 2010
170m
350m
600m
810m
1.0bn

m
i
l
l
i
o
n
Nutrition
Performance
Materials
Pharma/Other
All Clusters
Figure 5. DSMs sales growth based on innovations in selected areas.
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Case Studies
DSMa global chemicals, nutrition, and pharma manufacturer based in the Netherlandscentered its strategic growth
plan around a culture of innovation and sustainability, focusing on creating the environment where innovation can occur
and new products can be rapidly introduced into the marketplace.
7
Innovation is currently providing a strong growth
engine for DSM (see Figure 5).
To support that goal, DSM Research has undertaken initiatives to improve its conceptual design work processes for rapid
examination of more design alternatives, assessment of those alternatives in terms of capital and operating cost, and
achievement of what they call optimized scope (see Figure 6).
This has been achieved
through integrated use of
the Aspen Plus process
modeling tool and the
Aspen Process Economic
Analyzer economics
tool.
8
One of the side
benefits that DSM has
reported is the ability to
capture their process
knowledge in the form of
libraries of process
functional units and
technological blocks that
can be reconfigured in
the synthesis of scope
and flow for different
process alternatives.
These libraries contain
not only process
performance (in the form of process simulation models), but also associated capital costs (in the form of cost models).
DSM cites several features and benefits from this approach. A key advantage is that there are no black boxes in this
approach. All details are accessible and adaptable. The approach allows process engineers to evaluate and compare
process alternatives, quickly and accurately, providing trusted advice for the business decision makers.
Fluorone of the largest international EPC organizations and like most other engineering services contractors, is
under extreme pressure to compress project schedules, increase use of concurrent engineering, reduce engineering man
hours per project, and more effectively utilize value engineering centers, all while increasing engineering accuracy
and consistency.
Figure 6. To help drive innovation and expedite delivery of new products, DSM has implemented
an optimized approach to the design, review, and estimating process.
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Fluor has proactively
addressed this
through selection and
adoption of a
common toolset and
a standardized
workflow that
supports the use of
those tools. One of
the goals is to
facilitate electronic
transfer of project
data between project
participants. Another
objective is to provide
a framework for
maintaining project consistency while promoting concurrent engineering (see Figure 7).
Fluor has identified integration between process engineering and estimating as strategic. They see that 80% of capital
costs and 100% of operating costs are determined by design decisions made very early in the project, when engineering is
far from complete. Therefore, their organizations goal is to provide the estimating group with process engineering
information as early as possible to determine maximum impact on costs and designs at the front end of the project.
Fluors estimating group is a strategic asset to ensuring that clients projects are completed on time and on budget, and, as
such, the group is relied on heavily and often resource constrained. Reducing re-keying of project data is one way to
empower the team and deliver value earlier in the process, reduce resource pressures, and speed up availability of cost
estimates for proposals, business decision making, and project tracking.
Fluor reports strong success in using the integration capabilities of the AspenTech simulation and economics products to
electronically communicate information between process and estimating groups and to bring that forward throughout the
estimating lifecycle.
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The benefits to Fluor and its customers have included cost-optimized designs, providing cost estimates for timely
decisions and enabling the customer and key decision makers to focus on the important issues. A side benefit has been
increased communication between disciplines.
Preliminary
Equipment Sizes
Estimate
Report
iPID
3D PDS,
Material Manager
Aspen Capital
Cost Estimator
Simulations
Pipe Router
Data Sheets
Aspen Process
Economic Analyzer
Figure 7. Fluors recently adopted front end data flow provides a standardized framework for maintaining project
consistency while improving efficiency and communication.
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Summary
Process engineering has long had the goal of incorporating reliable cost information (both capital and operating) into the
analysis of their designs. Business realitiesforcing organizations to make development decisions earlier in the design
processhave sharpened this requirement. AspenTech, working in close consultation with several of its largest customers,
has combined the strengths of its market-leading simulation and economic evaluation tools to enable better decision
making during conceptual design. An integrated workflow has been introduced to make sophisticated costing and sizing
models accessible to and usable by process engineers. The result is a set of integrated capabilities that enable more
process alternatives to be evaluated in constrained timeframes and, consequently, enable optimized designs. This recently
introduced approach has already been successfully adopted and proven by several leading companies worldwide.
List of Abbreviations
ACCE Aspen Capital Cost Estimator (formerly known as Aspen Kbase
)
APEA Aspen Process Economic Analyzer (formerly known as Aspen Icarus
Process Evaluator)
Aspen EDR Aspen Exchanger Design and Rating products (formerly known as the Aspen HTFS products)
IPCE Aspen In-Plant Cost Estimator (formerly known as Aspen Icarus
Project Manager)
EPC Engineering, Procurement, and Construction organizations
FEL Front end loading (also referred to as FEED)
FEL 1 Typical the first stage gate in the front end design process
O-O Owner operators (typically chemicals, refining, and exploration & production)
Contact Information
For more information contact: AspenEconomicEvaluation@aspentech.com
Or to access self-help tutorials and more visit:
www.aspentech.com/solutions/industry_solutions/epc/integrated-economics.cfm
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Lofton, Waymon (2010). [Fluor] Strategic Value of Estimating to Fluor. aspenONE Global Conference, Boston.
Worldwide Headquarters
Aspen Technology, Inc.
200 Wheeler Road
Burlington, MA 01803
United States
phone: +17812216400
fax: +17812216410
info@aspentech.com
Regional Headquarters
Houston, TX | USA
phone: +12815841000
So Paulo | Brazil
phone: +551134436261
Reading | United Kingdom
phone: +44(0)1189226400
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phone: +6563953900
Manama | Bahrain
phone: +97317503000
For a complete list of offices, please visit
www.aspentech.com/locations
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, the aspenONE
logo, the Aspen leaf logo, and OPTIMIZE are trademarks of Aspen
Technology, Inc. All rights reserved. All other trademarks are property of their respective owners. 11-3457-0913
About AspenTech
AspenTech is a leading supplier of software that optimizes process manufacturingincluding oil and
gas, petroleum, chemicals, pharmaceuticals and other industries that manufacture and produce products
from a chemical process. With integrated aspenONE solutions, process manufacturers can implement
best practices for optimizing their engineering, manufacturing and supply chain operations. As a result,
AspenTech customers are better able to increase capacity, improve margins, reduce costs and become
more energy efficient. To see how the worlds leading process manufacturers rely on AspenTech to
achieve their operational excellence goals, visit www.aspentech.com.

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Project Manager). The system employs internal cost

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