Embracing Advanced Probabilistic Forecasting for Smarter Industrial Investments
In an era of rapid change and increasing uncertainty, industrial organisations must rethink how they assess investments in assets and process technologies. Traditional financial models, such as Total Cost of Ownership (TCO), often fall short when it comes to accounting for future unknowns. Instead, companies—especially in the hydrocarbon sector—are turning to Whole-Life Value (WLV) analysis, which offers a more holistic view of an investment’s long-term benefits, including sustainability and risk factors.
The Shift from TCO to WLV
While TCO focuses primarily on capital (CAPEX) and operational (OPEX) costs, WLV integrates all value drivers, from financial performance to environmental impact. To enhance WLV analysis, companies are leveraging probabilistic forecasting techniques, such as Bayesian hierarchical analysis, which help quantify not just the potential benefits of different technology options but also the likelihood of achieving those benefits given uncertain future conditions.
A Case Study in Action
A recent study by Indicatura and Worley Comprimo applied WLV analysis to the selection of Sulphur recovery unit (SRU) technologies. By comparing multiple technology options against a baseline, the study demonstrated how probabilistic forecasting can identify the best-performing solutions in terms of both cost and carbon impact.
The Future of Investment Decision-Making
Industrial organisations that embrace probabilistic forecasting and WLV analytics will be better equipped to navigate uncertainty, optimise capital investments, and select the right technologies for a sustainable future. As market dynamics continue to evolve, these advanced techniques will become essential for making robust and resilient investment decisions.
To explore the full study and gain deeper insights into how probabilistic forecasting can transform industrial investment decisions, read the complete article here: Sulphur Article – Hydrocarbon Engineering, February 2025.
