AEIC notes: The need for government involvement in energy
Second, the energy business requires investments of capital at a scale that is beyond the risk threshold of most private-sector investors. This high level of risk, when combined with existing market structures, limits the rate of energy equipment turnover. A slow turnover rate exacerbates the historic dearth of investments in new ideas, creating a vicious cycle of status quo behavior.
The government must therefore act to spur investments in energy innovation and mitigate risk for large-scale energy projects. By heeding the following five recommendations, we feel the government can unleash the nation’s technology potential.
Full descriptions of Recommendations
Create an independent national Energy Strategy Board
Invest $16 billion per year in clean energy innovation
Create Centers of Excellence with strong domain expertise
Fund ARPA-E at $1 billion per year
Establish and fund a New Energy Challenge Program to build large-scale pilot projects
In the defense, health, agriculture, and information technology industries, this country has made a deliberate choice to use intelligent federal investments to unleash profound innovation. As a result, the country leads in all those realms. In energy, however, the United States has failed the grade, and is paying a heavy price for that failure. We are optimistic about the potential for dramatic change in the energy realm. To seize this opportunity, America must put aside partisan interests and make a strong, bold commitment.