New technologies, especially if capital intensive, frequently require public investment in demonstration projects. Typically, a first-of-a-kind plant is several times as expensive per unit of capacity as adding a plant after the technology has been piloted elsewhere. These initial high costs can present a substantial barrier, especially if the technology is lumpy (it cannot be acquired in small increments but must be purchased in large, discrete units) and billions of dollars are involved.

Demonstrating technology applications can show that new technologies need not be prohibitively expensive and can generate substantial benefits, thus encouraging adoption by similar companies. Demonstration projects inspire companies to implement new technologies and create the confidence to replicate them, facilitate staff training and stimulate ideas for further innovation.