DOE withdraws $3.7B in carbon capture, decarbonization grants
TL/DR –
The U.S. Department of Energy (DOE) has withdrawn $3.7 billion in awards from its Office of Clean Energy Demonstrations, impacting decarbonization projects including two carbon capture ventures planned by Calpine, which were due to receive $540 million in grants. The decision followed a financial review of each award, with the DOE concluding the projects were not economically viable and would not provide a positive return on investment for taxpayers. The DOE is also reviewing 179 awards totaling more than $15 billion in financial assistance, primarily focusing on large-scale commercial projects.
US Department of Energy nullifies $3.7 billion in clean energy awards
The US Department of Energy (DOE) nullified $3.7 billion in awards from its Office of Clean Energy Demonstrations, including $540 million for two carbon capture projects by Calpine.
The nullified awards, primarily intended for carbon capture and sequestration along with other decarbonization projects, include companies such as PPL Corp., Ørsted, and Exxon Mobil Corp.
Calpine’s cancelled grants were for Carbon Capture Sequestration (CCS) projects at the Sutter power plant in Yuba City, California, and the Baytown power plant in Baytown, Texas.
After a comprehensive financial review, DOE concluded that these projects didn’t advance the energy needs of Americans, were not economically viable, and would not yield positive ROI of taxpayer dollars.
Of the 24 scrapped awards, 16 were signed between President Donald Trump’s election in November and January 20, says DOE.
The DOE evaluated these nullified awards under a review process initiated this month. Currently, the department is reviewing 179 awards, amounting to over $15 billion in financial assistance.
DOE stated that it’s prioritizing large-scale commercial projects requiring detailed information from recipients in this initial review phase; the process may extend to other DOE program offices as reviews progress.
DOE established the Office of Clean Energy Demonstrations in late 2021 to manage around $27 billion in funding appropriated by the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, as per a mid-November report from the US Government Accountability Office.
Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, termed DOE’s decision as “shortsighted,” arguing that it isn’t a recipe for future competitiveness or bringing manufacturing jobs back to US communities.
The award cancellations are a “major step backward in national deployment of carbon management technologies,” remarked Jessie Stolark, the executive director of the Carbon Capture Coalition.
According to Iliana Paul, deputy director for industrial transformation at the Sierra Club, DOE’s decision is a setback to American competitiveness, job creation, and cleaner air.
“American workers, fenceline communities, and progressive companies have had the rug pulled out from under them,” she stated.
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