Accelerating the Energy Transition: Where SR&ED Fits In

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Author
Aryn Guthrie
Posted
June 03, 2022

The Scientific Research and Experimental Development Tax Incentive Program (SR&ED) is the largest source of federal government support dedicated to encouraging innovation in Canada. The program is available to businesses of all sizes and in all sectors that conduct research and development (R&D).

Research and development powers innovation. To stay competitive and meet Canada’s commitment to net-zero emissions, the energy industry needs to work together to mobilize at a pace never seen before and invest in the technologies that are paving a path forward. As the energy industry transitions, scientific knowledge and technology has become top of mind to aid this shift. Copoint has identified opportunities within these energy sectors that are prime candidates to take advantage of the SR&ED program:

Oil & Gas Innovation

The Oil and Gas (O&G) industry has made tremendous strides to commit to a low-carbon future. Throughout the years, Copoint has worked with clients whose innovations have helped establish Canada as a leading O&G producer while also reducing GHG emissions. We have seen first-hand how important the SR&ED program can be to the O&G industry to innovate and help companies grow faster, all while ensuring the long-term viability of global energy resources. Tech innovation trends related to O&G that are not going away anytime soon, and are eligible for SR&ED include:

  • Production/Facility Monitoring (e.g. Internet of Things (IoT), predictive maintenance, robotics and automation, artificial intelligence)
  • Downhole Tools/Equipment, Improving Operational Efficiencies (e.g. stimulation/fracturing techniques, sleeves/bottomhole assemblies (BHAs), packers, artificial lift enhancements, etc.)
  • Enhanced Oil Recovery (EOR) & Chemical Engineering (e.g. nanotechnology, new chemistries to withstand high temperatures, etc.)
  • Carbon Capture, Utilization & Storage (CCUS) (e.g. fugitive/methane emissions reduction technologies)
  • Data Science/Technology

Decentralized Energy

Canada saw an undisputable increase of natural disasters in 2021. As climate change becomes more prominent and policy makers increase commitments to emissions reductions, decentralized energy becomes a core focus for the power sector to adopt new technology and innovate. SR&ED can help companies who are performing research and development within the DE sector to offset the risk of funding and re-invest in the people, research and experimentation that allows their business to evolve. Decentralised Energy Canada named eight trends that hint at the rising importance of DE, and Copoint sees alignment between these DE technologies and the SR&ED tax incentive which include:

  • Resilient Infrastructure (e.g. green buildings, materials technologies)
  • Microgrids & Smart Grids (e.g. grid optimization and smart buildings)
  • Energy Conversion & Storage (e.g. electrolysis, batteries, fuel cells)
  • Digitalization (e.g. artificial intelligence, big data, automation, etc.)
  • Circular Economy in Energy (e.g. waste to value, safe sink, recycling technologies)
  • Electric Transportation (e.g. battery and fuel cell technologies, charging grid optimization)

Renewable Energy & Cleantech

Renewable sources of energy are on the rise and play an important role in energy security. According to the International Energy Agency, renewable capacity grew by 6% in 2021 and will remain competitive through 2022 and into 2023. Renewables make up a sizable share of Canada’s cleantech economy, providing 18.9% of Canada’s total primary energy supply, and R&D will play an important role in the sector’s continued growth. Copoint has proven expertise helping cleantech companies get the highest return on their R&D investment. Strong areas of SR&ED eligibility include:

  • Solar (e.g. photovoltaic technology, concentrated solar, performance monitoring/prediction)
  • Wind (e.g. wind-farm optimization algorithms, sustainable blade design, noise reduction, fault detection)
  • Microhydropower (e.g. low-head and hydrokinetic turbine development)
  • Hydrogen (e.g. new production/processing techniques, distribution and utilization technologies, hydrogen for mobility)
  • Geothermal Energy & Waste-Heat Recovery
  • Biomass, Biofuels & Renewable Natural Gas (RNG)
  • Marine Energy (e.g. tidal power, wave energy conversion, offshore wind)
  • Modular Nuclear Reactors

Copoint knows true innovation is hard-won, our job is to make it easier. We’ve filed more than 5,000 successful SR&ED projects, and our record proves that we consistently deliver on complex files, securing tens of millions for our largest client claims. If your company has any projects you’d like to explore for a potential SR&ED refund, or are interested in discussing SR&ED services, reach out to speak with our advisors at info@copoint.ca