Regional Direct Air Capture

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.

Regional Direct Air Capture Hubs FOA Insights

On December 13, 2022, the Funding Opportunity Announcement (FOA) was released for the Regional Direct Air Capture (DAC) Hubs in accordance with BIL Section 40308. This FOA provides funding for eligible projects that contribute to the demonstration of four domestic Regional DAC Hubs to commercialize CO2 removal via integrated capture from the atmosphere, processing, transport, and secure geologic storage and/or conversion.

Regional DAC Hubs (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 tones of carbon dioxide from the atmosphere annually, (3) demonstrate the capture, processing, delivery, and sequestration or end-use of captured carbon, and (4) could be developed into a regional or interregional carbon network to facilitate sequestration or carbon utilization.

The Department of Energy expects to make approximately $1,236,000,000 of federal funding available via approximately 22 awards under this FOA, subject to the availability of appropriated funds. Individual awards may vary between $3,000,000 and $500,000,000 of federal funds, or less if a significant amount of work has already been completed either at private expense of on another DOE award.

The FOA will be carried out in three topic areas (i.e., TA-1, TA-2, and TA-3). Only detailed Phase 0 (TA-1), Phase 1 (TA-2), and Phase 2 (TA-2) applications are being solicited at this time. For TA-2 and TA-3, information relating to initial plans to carry out subsequent phases will be required to assess the potential viability of the proposed DAC Hub.

TA-1: The federal cost share is up to 80% maximum for project costs for research and development projects.
TA-2 and TA-3: The federal cost share is up to 50% maximum of the total project costs for demonstration and commercial application projects.

Applicants must submit at Letter of Intent by 5 p.m. ET on January 24, 2023, to be eligible to submit a Full Application. Full applications are due on March 13, 2023, and DOE expects to provide selection notifications by June 30, 2023.

The Letter of Intent must provide the following information: project title, lead organization, organization type, whether the application has been previously submitted to DOE, percent of effort contributed by the lead organization, key project team personnel, technical topic area, and a 4,000-word abstract.