Outline Specification
Seaweed Anaerobic Digestion: Foresighting and economic modelling
For ITI Project Seaweed Anaerobic Digestion
8th July 2009
Revision: 3 – Final
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1.1
Scope
Introduction to ITI Energy
ITI Energy commissions and manages early stage research and development programmes across the energy spectrum. Our investment strategy is based on assessing future market needs, identifying commercially viable technology opportunities to meet these needs and commissioning research programmes to develop and validate the technology through to the prototype stage. We aim to develop valuable intellectual assets to license to appropriate commercial vehicles and provide guidance on funding opportunities and business mentoring to then take the technology through to market commercialisation. We do this in collaboration with partners from industry, academia and the financial community. In commissioning R&D programmes, we will, in most cases, provide all or the major part of the funding and retain overall project management responsibility. We will work closely with research providers in order to ensure effective delivery of the new technology. We will also take responsibility for managing the commercialisation process, recognising, as we do so, the need to create value on an ongoing basis for all those involved in the project. Throughout this process, we will protect the intellectual assets that our investments generate, enhancing its competitive positioning, and helping to bring the resultant technology to market.
1.2
Introduction to Seaweed Anaerobic Digestion
ITI Energy is investing up to £3.7 million to develop seaweed anaerobic digestion and aims to facilitate the exploitation of a presently under-utilised, but a globally available natural resource, through the development of key enabling technologies. Seaweed has significant benefits over land-based crops (lack of lignin, land use, etc) but is presently uneconomic to harvest and process into fuel. Seaweed is a wet aquatic plant hence energy technologies such as combustion are not viable. Anaerobic Digestion, AD, which can be accomplished with wet biomass such as seaweed, is the best candidate; however, AD has not been optimised for seaweed. The 4 year programme is divided into 3 phases each with discrete markets, technical challenges and IP opportunities, as well as separate R&D work packages and tender competitions.
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Phase 1 is focussed on the near-term market opportunities to utilise Seaweed Anaerobic Digestion
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Phase 2 is focussed on the mid-term market opportunities to create sustainable and low cost energy supplies for island communities.
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Phase 3 is focussed on the long-term market opportunities to intensify and automate the aquaculture industry.
This Outline Specification is for R&D services to be completed in Phase 1 of this programme in order to influence the specific direction of Phases 2 and 3.
1.3
Motivation for Requesting This Service
ITI Energy wishes to commission extensive research and analysis of influencing factors on anaerobic digestion of seaweeds into biogas.
1.4
Partner Profiles
We particularly encourage submissions from (in no particular order): • Consultants with expertise and experience of market, policy and technical analysis, foresighting, and economic modelling especially with strong linkages and a proven track record in the areas of: o o o o • Renewable technologies Anaerobic digestion Seaweed cultivation and harvesting Broader energy markets
Commercial R&D partners, such as specialist technology developers, especially with a proven track record in the areas of: o o o o Anaerobic digestion Seaweed cultivation and harvesting Renewable technologies Broader energy markets
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End Users and Supply Chain members, again where the organisation has relevant consultancy expertise, and may wish to participate in further commercialisation and prototyping activities: o o o Anaerobic digestion facility operators Anaerobic digestion equipment suppliers Biogas producers and/or suppliers
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Research Providers such as: o o Universities willing to take on the work on a fast track commercial basis. Research Institutions
1.5
Outline Requirement
The summary of this requirement is segregated into three stages of work: 1) Ascertain the various drivers for SAD in terms of the specific markets as well as wider influential factors. 2) Undertake foresighting work that will inform ITI Energy on the direction of subsequent phases of work and commercialisation routes. 3) Develop an interactive economic model that incorporates the varying factors that will influence the commercial viability of SAD This work is to be presented with a specific Scottish context, then broadening out to incorporate UK-wide, EU and global markets and influencing factors.
These stages are likely to be run consecutively, but should be treated as distinct pieces of work. As such, you are free to bid for one, two or all of these stages of work, but each stage should be presented and costed separately.
No penalty will be applied if less than all three stages of work are bid for. It can be assumed that ITI Energy, as part of its ongoing activities, can provide baseline pricing forecasts including oil, gas, ROCs etc.
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1.5.1
Stage 1
As part of the SAD programme, ITI Energy is looking to ascertain the various near- and mediumterm commercial drivers for SAD in terms of the specific market as well as wider influential factors. These drivers will require the relevant analysis that will enable an understanding of the nature and extent of SAD (and related) markets going forward, expanding out from Scotland to the UK, EU and then global markets. The work should seek to identify pivotal issues, barriers and risks to the development of SAD and offer solutions; qualifying them in terms of their viability in the form of a risk register, SWOT analysis and/or other techniques. It is anticipated that the work will consist of desk-based research to include a literature review and a number of expert consultations. The work should culminate in a suitably presented and fully referenced report detailing the approach to work, outcomes of the research, analysis, conclusions and recommendations. 1.5.2 Stage 2
Building from the analysis of Stage 1, ITI Energy seeks to undertake foresighting work (possibly using scenarios, gap analysis, technology mapping or other methods) that will inform on the direction of subsequent phases of work and commercialisation routes by highlighting how key drivers for the commercial success of SAD could evolve. This work should be wide ranging, taking into account policy developments, economic developments, market demand etc, with a 1020 year view. The work will be sense-checked by relevant industry experts suggested by the consultant/R&D provider (costed into the proposal if appropriate) and ITI Energy’s own review panel. It is important that the chosen provider can demonstrate a relevant and strong understanding of the research area and the foresighting techniques they plan to use. Furthermore, linkages and routes to relevant industry experts should be demonstrated. The work should culminate in a suitably presented and fully referenced report detailing the approach to work, scenario development, rationale and presentation, analysis, conclusions and recommendations.
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1.5.3
Stage 3
In support of the scenario planning and foresighting work, ITI energy requires an interactive economic model that incorporates the varying factors that will influence the commercial viability of SAD. The model will be used along side the scenarios to evaluate their economic viability and enable the evolution of the economic case as the research develops and external influences vary. These may include the value of ROCs, potential of feed-in tariffs, alternate energy costs etc. This
model will then be used to undertake a cost-benefit-analysis (CBA) and the factors varied as part of a sensitivity analysis and possible Monte Carlo Simulation. It is anticipated that the economic model will be developed in Microsoft office software such as Excel or Access so it is workable by ITI Energy staff post-delivery. However, alternate options will be reviewed with interest. The work should culminate with a workable model, a detailed report discussing the approach and rationale of the model, conclusions of the outputs of the CBA, and a user guide and dissemination workshop for ITI Energy at their offices in Aberdeen.
1.6
Reporting
All results shall be provided electronically in an Adobe Acrobat PDF file or in spreadsheet table form in Microsoft Excel or in document form in Microsoft Word. All reports should be fully referenced in a consistent style and in line with the detail presented within each of the stages above. All sketches, results, comments etc from the researchers shall be recorded in laboratory notebooks/day books that will be handed over to ITI Energy as part of the execution of the potential contract. All software tools used to gather and process and present data shall be identified to ITI Energy and if necessary made available to allow all data and conclusions to be examined independently by ITI Energy and/or our consultants. Key staff from the provider will be required to attend at least three ITI Energy team meetings, per stage of work, along with other collaboration partners, in order to discuss the findings of the research work: These costs should be built into the proposal.
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2.1
Commercial Requirements
Management
The provider will be responsible for all procurement, scheduling, set-up, validation, calibration, rectification, dismantling and disposal activities of any consumerables required. The provider will nominate a single person as primary point of contact for the activity, and demonstrate that a deputy is available. ITI Energy will nominate the Programme Manager as the primary point of contact along with a deputy. In order to avoid doubt, communications and the authority to vary the work shall be between the primary points of contact at ITI Energy (Programme Manager) and the nominated primary contact at the research provider.
2.2
Capability
It would be to the provider’s advantage to provide a selection of the following: • Previous projects, key client accounts, testimonials and the type of service offered to them • • CVs of key personnel who would carry out the work Annual reports or financial statements to demonstrate a track record of trading in this market segment (only if requested) • • Capability statements Details of any quality assurance qualifications and operational procedures such as ISO9000, ISO17025 • • Geographic location where the work would be carried out Collaborations with other research providers, especially Scottish universities and institutions. • Full breakdown of costs by staff member and activity of work, indicating the number of days and appropriate rate.
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2.3
Form of Contract
ITI Energy will use its standard form of R&D contract for research providers. A list of the main contract principles is provided as an appendix to this specification. Respondents to this tender should indicate that they are comfortable with these principles or any proposed changes. ITI Scotland will own any intellectual property produced under this contract.
2.4
Confidentiality
In order to discuss the exact nature of the seaweed anaerobic digestion opportunity being investigated with ITI Energy, research providers will need to enter into a Non Disclosure Agreement or a contract to provide the research service which will include non-disclosure provisions. The contractual basis of the research work requires commercial secrecy. Any academic partner that has a requirement to be allowed to publish results and conclusions based on the work must observe a certain period of non-disclosure (sufficient for ITI Energy to protect, if appropriate, the results gained), and should incorporate this in their offer of service.
2.5
Payment Terms, Milestones & Deliverables
Payment terms shall be following successful completion of agreed scopes of work. Deliverables shall be tangible such as the issuance of a report on paper or CD. Advance payments are not possible; however, milestones can be set for deliverables and payments so as to maintain low cash outlays for smaller providers in order to promote the participation of SMEs. It would be useful for rates and availabilities of key technical staff and resources to be tabulated in the offer since it is the nature of research and development work that variations to the programme will be required.
2.6
Warranties
ITI Energy will expect the work to be carried out in a competent and professional fashion. Providers will be required to provide a warranty in relation to the quality of the work. ITI Energy will inspect deliverables and will not accept deliverables that are deficient against the acceptance criteria agreed within the contract, so research providers should ensure that they have the necessary capability to successfully complete any contract that they might enter into. 7
2.7
Timescales
The above package of work is part of a wider research campaign in which the provider is expected to participate. It is anticipated that work will begin September 2009 with stage 1 lasting for up to 4 months. When it is possible to start stages 2 and 3 they should last for no longer than 3 months and 2 months respectively.
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3.1
Responding To This Specification
Obtaining Further Information
General background information on ITI Energy is available from www.itienergy.com. Clarification of detail in this specification is available by contacting the Programme Manager (as below).
3.2
Format of Response
Responses may be in writing in the form of a letter, facsimile or e-mail. ITI Energy would prefer electronic communications in Microsoft Word (97, 2000 or XP format) or Adobe PDF. E-mails with Adobe PDF are the best method. Offers shall be for a fixed price for a fixed, fully identified scope of work with options clearly identified and separately tabulated.
3.3
3.3.1
Correspondence Address
Postal Correspondence Seaweed Anaerobic Digestion Programme ITI Energy 6th Floor The Exchange – No 1 62 Market Street Aberdeen. AB11 5PJ Scotland.
Please mark envelopes and packages as appropriate: “Correspondence” or “Tender Offer”. Tender offers will not be opened until after the closing date. 3.3.2 Facsimile Correspondence To: +44 (0)1224 282631 Please note that Tender offers should not be made by facsimile
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3.3.3
Telephone Correspondence
Telephone contact can be made with the project team as follows: Primary contact should be with the interim Programme Manager, Dr Craig Rose PM Office: +44 (0)1224 282 651 PM Mobile: +44 (0)7791 790 009 Otherwise a deputy, David Butler can be contacted through the ITI Scotland switchboard: +44 (0)1224 282630 Tender offers must be in writing. 3.3.4 Electronic Mail
Correspondence by E-Mail is encouraged. Primary contact: craig.rose@iticontractor.com Secondary contact: david.butler@itienergy.com
3.4
Closing Date
Questions and clarifications shall be concluded, and final offers shall be received at the above correspondence addresses by noon, 26th August 2009 with a readiness to enter into a contract within three calendar weeks of that date.
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Appendix Principles of R&D Contract
Commercial R&D contract based on procurement approach. Payment on receipt of Deliverables, payment not based on time and materials. All Foreground IP owned by ITI and must be kept confidential at all times. Access to Background IP incorporated into R&D agreement. R&D project to be co-ordinated by ITI appointed project manager.
General Principles
Foreground IP • • • • • • Ownership of all Foreground IP generated is assigned to ITI. Any commercial use of the Foreground IP by Provider will be based on fair market rates and will be negotiated under separate licence. ITI responsible (at its own cost) for protection and maintenance of Foreground IP. Provider to supply ITI with all reasonable assistance in the protection and maintenance of Foreground IP at ITI’s expense after conclusion of the R&D project. Any access to Foreground IP by any party will be based on fair market rates. Provider obliged to provide Innovation Disclosure Forms and to keep a log book of all work carried out. Such log books will be provided by ITI and will remain the property of ITI.
Academic Use • ITI recognises that it is an essential role of academic institutions to add to the pool of public knowledge and will support the use of Foreground IP for academic teaching/publication and academic research, subject always to the overriding principle of ITI being able to ensure protection of the research outputs of projects.
Background IP • The Provider retains ownership of any of its Background IP used in the research project, but agrees to license it (for use in carrying out the research project) to ITI for the duration of the R&D agreement. 11
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Provider not to use its Background IP for the purposes of the research project without ITI’s consent. If it does so ITI is automatically granted a free irrevocable licence to that BIP for purposes of subsequent R&D and commercialisation of ITI’s Foreground IP.
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Access to relevant registered Provider Background IP may be required for subsequent R&D and/or commercialisation of ITI’s Foreground IP, and this will be sought on commercial terms.
Confidentiality • • • • • All Foreground IP to be kept confidential by Provider. Background IP confidential between ITI and Provider. Provider can disclose Foreground IP to extent necessary to perform R&D but must ensure flow down of confidentiality terms prior to disclosure. ITI bound by the Freedom of Information (Scotland) Act 2002; however, commercially sensitive or confidential information will be protected by exemptions wherever possible. ITI has discretion, if necessary, to require Provider to sign additional multiparty confidentiality agreement which binds all Providers and Commercialisation Partners, if any.
Acceptance Criteria • • • Acceptance Criteria is agreed between ITI and the Provider prior to commencement. ITI will decide whether R&D contract Deliverable meets agreed Acceptance Criteria. If a Deliverable is non-conforming then there is a management process provided for in the R&D contract to deal with this. However, if this process does not resolve the issue then ITI has the ultimate right to terminate the contract.
Change control process • • • Governs all changes to project including, schedule, costings, scope of work, deliverable content and acceptance criteria. Escalation process within each organisation if change request cannot be agreed. If change request cannot be agreed after escalation to senior level in both organisations, formal dispute resolution clause can be invoked. 12
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Authorised change control modifies contract and is therefore contractually binding.
Payment Terms • • No payment until Deliverables are accepted by ITI, payment not based on time and materials. Where Deliverable is late, ITI shall set amended Delivery Date. If amended Delivery Date is missed then ITI Programme Manager entitled to terminate R&D Agreement or set further amended Delivery Dates along with the option of reducing the Acceptance Fee for the particular Deliverable by up to 20%.
Warranties, liabilities and indemnities • • Provider warrants that it will not knowingly infringe third party IP rights in performance of R&D agreement. Provider warrants that all results and other output arising from its work under the R&D agreement is original and the product either of its own efforts or (if relevant) those of a declared sub-contractor. r • Provider warrants that it has the right to grant the Background IP licences; that it is the owner of the Background IP and that, to the best of its knowledge, the use of the Background IP will not infringe the rights of any third party. • Provider indemnifies ITI against any third party claims arising from breach by Provider of the warranties set out above.
Termination • • • Failure of Provider to maintain a comprehensive record of work is a material breach. Either party entitled to terminate with immediate effect for material breach. ITI has the right to terminate upon 3 months notice.
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