Regional Direct Air Capture

Guidehouse reviews a new Funding Opportunity Announcement for the development of four regional Direct Air Capture hubs

On December 13, 2022, the United States Department of Energy (DOE) released a Funding Opportunity Announcement (FOA) for the development of four regional Direct Air Capture (DAC) hubs. DAC is a promising new technology that captures carbon dioxide (CO2) from the air, however it is currently costly and requires a significant amount of energy to operate. These hubs will accelerate the commercialization and demonstration of carbon capture and storage technologies, with the goal of lowering the cost of DAC through the development of networks for the capture, transport, and storage of CO2.

The funding for these DAC hubs is part of Section 403018 of the Bipartisan Infrastructure Law (BIL), a sweeping infrastructure bill signed in November 2021. The DOE has made $1.2 billion available via 22 awards for the first round of funding, and applicants have until January 24, 2023, to submit a mandatory letter of intent. Individual awards may vary between $3 and $500 million of federal funds, or less if a significant amount of work has already been completed either at private expense or another DOE award. To be eligible, DAC hubs must:

  1. Facilitate the deployment of direct air capture projects, 
  2. Have the capacity to capture and sequester, utilize, or sequester and utilize at least 1,000,000 metric tons of carbon dioxide from the atmosphere annually, 
  3. Demonstrate the capture, processing, delivery, and sequestration or end-use of captured carbon, and
  4. Be developed into a regional or interregional carbon network to facilitate sequestration or carbon utilization. 

This program is the largest single federal investment in DAC technology to date, and the DOE has emphasized the importance of community engagement and job creation in these efforts. There are several potential benefits for an electric utility to apply for this grant:

  1. Access to funding: The grant provides access to funding for the development of DAC technology, which can be expensive to develop and deploy on a large scale. By participating in this grant program, an electric utility can potentially secure financial resources to help advance their DAC efforts.
  2. Opportunity to demonstrate leadership in clean energy: By participating in this grant program and investing in DAC technology, an electric utility can demonstrate their commitment to clean energy and leadership in the fight against climate change. 
  3. Potential cost savings: DAC technology has the potential to reduce the cost of decarbonizing the electricity sector. By participating in this grant program and investing in DAC, an electric utility can potentially save money on carbon reduction efforts in the long run.
  4. Potential for new business opportunities: DAC technology has the potential to create new business opportunities, such as the development of carbon capture and storage networks. By participating in this grant program, an electric utility can potentially position themselves to take advantage of these new opportunities.
  5. Opportunity to contribute to the development of DAC technology: By participating in this grant program, an electric utility can have a direct impact on the development and advancement of DAC technology. This can help to ensure that DAC becomes a viable and cost-effective solution for decarbonizing the electricity sector.

Back to top