The capital and operational costs of initiatives play a fundamental role in determining the economic viability of a proposal. It is therefore imperative that the capex and opex estimates used in the economic appraisal are robust.
Therefore, proponents should detail full year by year costs for the lifetime of the initiative to at least a P90 standard where appropriate. In addition, the basis for those costs, including specialist engineering and operations reports, should be provided, and the P90 should be based on detailed probabilistic cost estimates, not the incorporation of large contingencies to claim a degree of certainty that is in fact not justified by the stage of analysis. For the avoidance of doubt, P90 estimates created by the inclusion of large contingencies will not be treated as P90 estimates.