Demo plant instead of pilot plant?
The benefits of having a down-scaled integrated pilot plant if the commercial scale process design contains more than 4 new process steps or a recycle stream, or a new solids process step, or a crude solids feed has to be processes are confirmed by statistical information of Independent Project Analysis . Or stated otherwise if any of the four conditions apply and an integrated pilot plant with long duration test results are not available then commercial scale disaster is certain. Disaster means more than 40% additional cost and more than 30% longer start-up time than scheduled for. Having a pilot plant however, means that the development time is extended by 1-3 years.
Sometimes a company decides to skip the pilot plant and replaces it by a small capacity demo plant. The demo plant is typically a factor 10 smaller than the commercial scale plant. The demo plant directly produces product for sale, gives confidence to the company that the large scale process can be designed, constructed, and operated. It also keeps development time short because the pilot plant is avoided.
However, there is one negative aspect of replacing the pilot plant by the demo plant. If the conditions described above for needing a pilot plant apply then the start-up time of the demo plant will be more than 40% larger, then scheduled and additional cost for getting the demo plant to operate at steady state is more than 30% of the original investment cost.
To illustrate this with an example. A process design contains 3 new process steps and has a recycle stream from step 3 to step 1. The final commercial scale design is for production rate of 100 kt/and requires an investment of 100 million euros. The demo plant has a design capacity of 10 kt/a, and requires an investment of 30 million euros. The scheduled start-up time to steady state for the demo plant is 15 months.
The demo plant starts up and after 2 years no steady state production has been reached. Also, more than 10 million euros has been invested to solve the problems encountered. Management, or the bank, decides that no more money will be spent on the demo plant. The whole project ends, and no commercial scale process is envisaged anymore.
If instead, a pilot plant has been designed, constructed, and operated, with an investment of 1 million euros and all problems shown up would be solved in the two years of running it, and the additional cost were 1 million euros. Then the commercial scale process would be envisaged with confidence.
 Independent Project Analysis information reported in: Industrial Process Scale-up, 2nd revised ed. author Jan Harmsen, Elsevier, Amsterdam (2019).