It is clear that the United States’ future depends on energy self-reliance. This year’s political season has undoubtedly helped to reinforce that need. While there is much debate about the method with which energy will be produced, generated and obtained, there is no debate of the need to do so.
The climate for energy solutions must satisfy a litany of demands – environmental, political, consumer and financial are among the major factors. With the current economic situation and the possibility of potential reduction of available credit, the energy industry could be facing far greater challenges than ever before.
While ongoing new technology research and development are part of the solution, the availability of any new developments are off in the distant future. For example, new nuclear energy: the first new nuclear plant won’t be online until, at best, 2020. Renewable energy: currently there aren’t any large scale solutions available and these solutions, if they can be developed, may take years to come to market.
How do we get there from here? How do we transition to a more stable, self-reliant and eco-friendly energy generation future? How do we fill the energy gap?
The answer lies, for the most part, in our ability to squeeze more out of what already exist. Our existing fleet of generation facilities must be able to produce greater amounts of energy that is cleaner and produce it more reliably. The existing fleet of electricity generating plants is aged – on average fossil fuel plants are over 40 years old and existing nuclear plants are nearly 30 years of age. The need to invest, re-invent, and improve these existing plants to burn more flexible fuels, to burn more efficiently, to increase maximum production capabilities, to extend the life of these plants and to create energy output safely and reliably are critical to future U.S. energy plans.
The R&D Tax Credit should be an ever increasing component of utilities’ financing and budgeting portfolio to enable energy producers to create this bridge. Utilities and other energy producers should be able to rely on and infuse the R&D tax credit as part of their investment strategies. This need is increasingly becoming more critical with the current infringement on financial confidence and the lack of economic and financial stability.
Continuation of the R&D Tax Credit through 2009 is a good start, making the tax credit permanent or at a minimum exist over a longer-term period, should be made. With all of the uncertainties that exist in today’s world, the R&D tax credit shouldn’t be one of them.