Why Techno-Economic Analyses Still Surprise Me — Even After 20+ Years in Scale-Up
- Gustavo Valente
- 5 days ago
- 4 min read
After more than 20 years working in process development and industrial scale-up, you might expect techno-economic analysis to feel… predictable.
It doesn’t.
I still find myself surprised — not by exotic technologies or bleeding-edge biology, but by very ordinary, very real constraints that only become visible once a comprehensive
TEA is done properly.
Many teams come into a TEA expecting it to simply confirm what they already believe:
feedstock price is the main cost driver
utilities are secondary
labor is manageable
waste is “just disposal”
And then the model runs.
a) Feedstocks — not price, but sourcing reality
Most founders already know that feedstocks matter, and they fully expect them to represent a significant fraction of production cost.
What’s often underestimated is scale.
At commercial scale, you’re no longer talking about kilos or even tonnes, you’re talking about hundreds of thousands of tonnes per year. That single shift in magnitude has a way of changing the entire conversation around plant size, location, logistics, and sometimes even the business model itself.
In many cases, the surprise is not the €/kg of a feedstock, it’s the huge, sometimes unmanageable, volume required at scale.
Once you start modelling this properly, storage infrastructure, logistics, seasonal availability, supplier concentration, transportation emissions, contracts, and working capital quickly move from secondary considerations to dominant constraints.
The feedstock may be “cheap”. The system required to source and handle it usually isn’t.
b) Utilities — the silent killers
Utilities are often treated as background noise early on. In practice, they rarely stay there.
In several TEAs I’ve worked on, electricity, steam, cooling water, or compressed air quietly overtook raw materials as the dominant operating cost.
And this isn’t limited to obviously energy-intensive downstream processing. Low-yield upstream steps, inefficient separations, or conservative operating assumptions can drive utility demand to surprisingly high levels.
In one recent case, utilities accounted for around 45% of the total cost of production. By redesigning and optimising a single processing step, utility consumption dropped significantly, bringing utilities down to ~25% of total cost, much more in line with what you’d expect from a commercially viable process.
That design opportunity only became obvious once the TEA showed the results.
c) Labour — not about cheap, but about design
Labour is often framed as a black and white decision: low-cost country versus high-cost country.
In practice, TEA tends to reveal something more complex and, frankly, more interesting.
I’ve seen that processes can operate competitively in high-labour-cost regions, not because they didn’t have a choice, but because process design decisions were made early on.
What typically emerges in a TEA is that labour cost is highly sensitive to:
the level and type of automation (not “more automation”, but the right automation)
the chosen production capacity, where under- or over-sizing can be more damaging than higher salaries
the quality and regulatory burden, which often drives QA/QC headcount faster than throughput
In several cases, the TEA makes it clear that a well-designed, appropriately scaled process in a high-labour-cost country can outperform a poorly scaled, labour-intensive process located elsewhere.
Labour doesn’t scale linearly, but more importantly, labour is not a location problem; it’s a design problem. And TEA is often where that becomes visible.
d) Waste — the cost nobody modelled
Waste is one of the most common “unknown unknowns”.
Everyone knows waste exists. But it’s not until a comprehensive TEA forces you to account for every single stream into the mass balance that its true impact becomes apparent.
More often than not, the issue isn’t the obvious waste stream, it’s an unaccounted side stream that quietly appears once the entire process is modeled end-to-end.
Sometimes that stream:
Turns out to be hazardous
Exceeds local discharge limits
Requires specialized handling or off-site treatment
Disposal costs, transport, permits, and long-term liabilities can easily rival raw material costs.
I’ve worked with teams who, after completing a TEA, stopped focusing on incremental improvements in microbial productivity and instead redirected their efforts toward replacing a single chemical input — because the TEA showed that waste management, not yield, was the real constraint.
e) Water & permits — when physics meets regulation
There are cases where the technology works.
The economics work.
And yet the project still stalls.
Usually, it comes down to factors that sit just outside the process flow diagram:
Local water permits cap freshwater intake
Discharge regulations restrict effluent composition
Regional infrastructure simply can’t support the facility
I once worked on a project that was technically and commercially viable, with water demand that would have been acceptable in many parts of the world.
Locally, however, the region was already operating at its limit. No extension was possible. The project stalled — not because the technology failed, but because the location did.
The technology itself was eventually sold and transferred to another region.
TEA doesn’t just model costs. It exposes feasibility.
What actually happens after a TEA
More often than not, TEA results don’t land as confirmation; they land as a surprise.
Sometimes that surprise feels like a big problem has just been uncovered:
a cost that doesn’t scale
a constraint that wasn’t visible before
an assumption that no longer holds
That moment can be uncomfortable.
But what usually happens next is more constructive than it might feel at first.
Teams take the results, step back, and rethink their strategy. They:
redesign parts of the process
revisit scale and location assumptions
adjust sequencing, partnerships, or even the initial market
in some cases, pause deliberately before committing more capital
The TEA doesn’t end the conversation. It changes it.
And that, in practice, is its real value.
Discovering constraints early doesn’t mean you’ve failed — it means you still have the freedom to adapt.
By the time those same constraints appear in the real world, that freedom is usually gone.
The real value of TEA
None of these outcomes are failures of TEA.
They are precisely why TEA exists.
A good techno-economic analysis isn’t there to confirm optimism. It’s there to surface constraints early — when they’re still design problems, not existential ones.
👉 Book a TEA scoping call
Gustavo Valente
Director, Sustech Innovation
WhatsApp: +52 55 3405 0552