10.2190/8A9P-3RQC-7KU6-T0RJ 8A9P3RQC7KU6T0RJ 4 Policy Incentives for Fluidized Bed Coal Conversion 59 68 20020509 20020509 20020509 20020509 8A9P3RQC7KU6T0RJ.pdf http://baywood.metapress.com/link.asp?target=contribution&id=8A9P3RQC7KU6T0RJ 1 Mark Maguire John D. Keenan Campbell Soup Company Department of Civil and Urban Engineering, University of Pennsylvania Fluidized bed combustion is a commercially available technology to burn coal. However, due to high capital costs, the technology is not economically feasible. In this research, a cash flow model was used to analyze the effect of several policy incentives, and to determine if the effectiveness of the incentives is a function of capital investment. It was found that tax credits are more effective than subsidies, accelerated depreciation has only a weak effect, and that an additional 20 percent tax credit is needed to exceed a minimum acceptable return on investment of 17 percent. The effectiveness of the incentives increases with increasing capital investment. A program is outlined to provide an additional 20 percent tax credit, at a cost of $6 billion but reducing oil imports by 8.7 percent. J. D. Keenan and M. Maguire, Cost Model of Industrial Fluidized Bed Boilers, to appear <i>Proc. ASCE, Journal of Energy Engineering</i>, 1983. Exxon Research and Engineering Company, <i>Application of Fluidized Bed Technology to Industrial Boilers</i>, prepared for ERDA by Exxon. EPA-600/7-77-011, 1977. Congressional Research Service, <i>Energy Factbook</i>, prepared by Congressional Research Service of the Library of Congress. U. S. Government Printing Office, Washington, D. C., 1980.