R&D Incentives and Co-Utilization: Electricity Market Performance

S.V. Berg


Renewables, regulation, innovation, electricity performance


Co-utilization of domestic fuels (CDF) represents a promising portfolio of new production processes and inputs. However, new technologies are unlikely to be adopted unless prototype testing demonstrates the efficacy of creative approaches to blending fuels. Beyond the R&D stage, utilities transforming inputs into useable energy must be convinced that these technologies will beneļ¬t the bottom line. The technical skills and innovations of engineers are needed more than ever, but unless the regulatory system rewards the introduction of more environmentally sustainable fuels, the funds needed for new initiatives are unlikely to be forthcoming. Current uncertainties regarding regulatory policies and industry restructuring along with investor perceptions of industry risk raise the cost of capital and thus reduce the likelihood of new initiatives. If the economic foundations of co-utilization are not solid, CDF will wait in the wings while traditional production technologies continue to dominate the marketplace.

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