The Trump administration’s endorsement of carbon capture and storage (CCS), nuclear energy, and next-generation geothermal as cornerstones of America’s future economic and security landscape marks a pivotal moment. However, translating this vision into reality demands addressing a critical hurdle: the “missing middle”—a structural investment gap that stalls the commercialization of groundbreaking energy technologies. This gap, where projects are too large for venture capital but too risky for institutional investors, poses a significant barrier to scaling innovative energy solutions.
To bridge this chasm, the federal government must learn from past successes. The rise of SpaceX, for instance, was fueled by direct procurement and funding from the Department of Defense and NASA. Similarly, shale gas drilling innovations benefited from targeted federal research and development, along with tax credits, creating industries worth hundreds of billions of dollars. These strategic investments underscore the potential for government intervention to catalyze commercialization.
The administration has an opportunity to replicate this success with current energy technologies. However, it must be cautious not to dismantle key incentives for emerging technologies. The recent House budget reconciliation bill, which proposes cuts to tax credits, threatens to undermine revenue adequacy for nuclear, geothermal, and CCS projects. This move could exacerbate the “missing middle” gap, making it even harder for these technologies to attract private investment.
To accelerate energy technology commercialization, the federal government should evaluate a systemic bankability framework outlined by the Clean Air Task Force. This framework identifies nine conditions essential for scaling energy infrastructure technologies:
1. **Construction cost overrun risk**: Mitigating the risk of escalating construction costs during the project lifecycle.
2. **Technology performance risks**: Ensuring that technologies perform as expected, delivering the projected output and operating costs.
3. **Revenue adequacy risk**: Guaranteeing that projects generate sufficient revenue to meet financial obligations.
4. **Regulatory certainty**: Providing predictable and efficient policy implementation relevant to project financial performance.
5. **Access to enabling infrastructure networks**: Ensuring projects can connect to necessary infrastructure, such as electricity transmission or carbon dioxide pipelines.
6. **Social acceptance**: Securing community support for project location and operation.
7. **Robust supply chains**: Maintaining reliable supply chains for project construction and operation.
8. **Access to commercial insurance**: Enabling projects to insure their financial performance.
9. **Adequate delivery system**: Ensuring sufficient labor and expertise for project construction, management, and operation.
Addressing these conditions is crucial for establishing systemic bankability, which attracts large-scale institutional capital and enables rapid, widespread deployment of technologies. The U.S. government can support these conditions through various mechanisms, including government procurement, regulatory reforms, and insurance, beyond direct and indirect incentives.
The path forward requires strategic support akin to that which propelled America’s aerospace and hydraulic fracturing industries. Recent actions by the Trump administration and Congress have had mixed impacts on overcoming the “missing middle.” Proposed tax credit cuts and the cessation of Department of Energy grant and loan programs could hinder private investment. However, executive orders on nuclear regulatory reforms offer a partial solution, though they fall short of driving new nuclear deployment.
To truly catalyze energy innovation, the U.S. government must address all nine conditions of systemic bankability. This includes additional executive orders to accelerate deployment, improve bankability conditions, and empower the Department of Energy to finance early-stage pilot and demonstration projects. The choice is clear: invest in bridging the “missing middle” or risk surrendering America’s innovation advantage.
For the construction industry, this shift presents both challenges and opportunities. The push for CCS, nuclear, and geothermal technologies will demand new expertise and infrastructure. Companies that can adapt and innovate in these areas will find themselves at the forefront of a green energy revolution. However, navigating the regulatory and financial complexities of these emerging technologies will require strategic partnerships and a deep understanding of the evolving energy landscape.
Moreover, the focus on systemic bankability highlights the need for construction firms to prioritize risk management, supply chain robustness, and community engagement. Projects that can demonstrate these qualities will be better positioned to attract the necessary investment and support.
The construction sector also has a role to play in advocating for policies that support these technologies. By engaging with policymakers and industry stakeholders, construction firms can help shape a regulatory environment that fosters innovation and investment. This proactive approach will be essential in ensuring that the U.S. maintains its leadership in energy technology and construction.
In this evolving landscape, the intersection of sustainability and construction is more critical than ever. As the industry embraces these new energy technologies, it will not only drive economic growth but also contribute to a more sustainable and secure future. The challenge is clear: the construction sector must rise to the occasion, leveraging its expertise and influence to support the commercialization of these transformative energy solutions.