Status – Project lifecycle definitions
This project (or asset) lifecycle status indicator describes the stages of a project (or asset) and is intended to help readers understand at what stage an individual hydrogen project sits – from the development planning and support required for an investment decision, to construction and commissioning, then operations, and finally through to project closure.
The definitions described herein should be used more as a ‘thought guide’ as not all projects will necessarily follow the (exact) decision path set out below.
The key decision point is when a positive final investment decision (FID, or similar depending on an organisation’s investment progression framework) is taken; the project can then be classified as having moved from development planning into construction (and then into operations).
While there are many different systems available to define project (or asset) lifecycle stages, often employing different terminology, all effectively use a similar broad framework. This is followed here but with a slight twist to account for, among the burgeoning growth of hydrogen project announcements, those projects that are at a particularly advanced stage of development planning (i.e. close to the FID decision point).
This stage covers a number of progressively more detailed and complex steps.
Initially, concepts are developed and early stage studies are carried out, often described as pre-feasibility studies. Different development options/sub-options and configurations, including alternative technologies, costs, risks and opportunities, are examined in a preliminary manner. Site assessment studies are often carried out at this stage.
Usually, a single development option is then progressed into a detailed feasibility study or front-end engineering design (FEED). Key activities at this development stage include:
- finalising overall design studies, including the specific technologies to be employed;
- key permitting / development approvals are progressed (and approvals received);
- finalising the selection of an engineering, procurement and contracting services provider;
- finalising detailed resourcing plans for construction and then operations;
- testing commerciality through technical/economic modelling and seeking funding;
- Capital and operating cost estimates are refined to narrow ranges.
In order to highlight particularly advanced stage projects in development planning, this is defined (as at June 2022) as a project that has a high likelihood of reaching the FID decision point by the end of 2022. In essence, the development option is sufficiently defined across all key project parameters (technical, financial, permitting, resourcing, contracting & procurement) for a FID to be made. In this period, it is not uncommon that schedule critical long-lead items may have been ordered.
Key Decision Point: Final Investment Decision (FID)
While in development planning, at the completion of each of the pre-feasibility, feasibility or FEED studies stages, a project may decide not to proceed or to be placed ‘on hold’ awaiting later decisions. In some cases, the completion of studies has informed developments allowing other projects or initiatives to progress.
A positive FID is made to proceed, remaining detailed engineering is completed, physical construction of facilities begins followed by commissioning of the constructed facilities. Once completed and any regulatory approvals are received, the facilities can move into operations.
The facilities are operated, maintained and modified within regulatory requirements.
The facilities are no longer operating and are being/have been decommissioned