R&D in the energy sector frequently contributes to a wide range of social, economic, and political objectives. The extent to which ‘pro-green’ values and strategies are being embraced by companies across all industries demonstrates a new attitude and urgency surrounding the climate-change issues that are affecting us all. R&D in the energy sector is, therefore, a global priority. UK companies continue to work towards improving renewable energy sources, achieving national energy security, and generating new and sustainable means of overall environmental conservation.
After all, energy-related sectors, such as petroleum products and oil and natural gas, gasoline, diesel fuel, heating oil, nuclear power, have a critical impact on environmental changes. As a result, the R&D in the energy field, especially the development of renewable, sustainable alternatives, moves the industry towards environment-conscious utilization of natural resources.
The UK has adopted a target for net-zero greenhouse gas emissions by 2050, with many companies and individuals arguing that this is not enough. Some of the latest energy-related trends and innovations developed as a response to this increasing environmental awareness and the governmental target are:
In the industry, there are two basic principles of renewable energy: to extract it from consistent sources, like the sun, the wind or other geothermal resources, and to convert the source into electricity or fuel.
Example: concentrated solar power, wind energy generation
Together with the blockchain network and the combination of AI and IoT, EaaS allows the transition from selling electricity to selling services such as consumption management, optimization of production, and tracking consumption, thereby, accelerating energy efficiency across the grid while providing access to more people.
Example: AI-powered building energy services, energy trading platform
Quantum Computing (QC)
QC in the energy sector focuses on developing new energy solutions, improving energy efficiency, and reducing the use of greenhouse gases.
Example: cloud-based asset management, optimization of energy utilization
PtX technologies convert energy and carbon dioxide (CO2) into new products and materials that are used for other purposes.
Example: power to liquid, gas to fuel
The energy industry requires R&D activities to facilitate the growing requirement to meet energy demands for the population. The transition to renewables and green energy remains at the forefront of technological development to create sustainable alternatives to fossil fuels. However, as gas and oil continue to be used, R&D is necessary to maximise efficiencies and minimise its harm to the environment.
Development of energy plant production efficiency requires extensive prototyping and experimentation from lab to plant-scale to increase the productivity of systems. While research into the chemistry and materials science provides initial validation for implementation, research into the process and chemical engineering aspect is necessary for reliable and safe scale-up.
The major challenges faced with renewable energy are energy storage and transportation, ensuring energy losses are minimised to ensure the process is economically viable. Additionally, advancement of the systems’ robustness and lifetime is required to ensure its cradle-to-grave assessment generates favourable results over using fossil fuels. However, innovation is still required for oil and gas recovery to lower operational costs and these activities would be considered R&D for tax purposes.
Despite the importance of health and safety inspections and safe handling of potentially hazardous chemicals, the costs incurred to ensure the procedure’s safety would not be considered R&D for tax purposes.
The major challenges faced with renewable energy are energy storage and transportation, ensuring energy losses are minimised to ensure the process is economically viable. Additionally, advancement of the systems’ robustness and lifetime is required to ensure its cradle-to-grave assessment generates favourable results over using fossil fuels.
Our team are highly qualified and experienced in STEM subjects, which enables them to accurately identify R&D-related activities undertaken by clients across the energy and materials science industry.
Book your free consultation to discover qualifying activities in your business and see how much your claim could be worth.
Dr Arwyn Evans
Senior R&D Tax Consultant