Enhancing Profit and CO2 Mitigation: Commercial Direct Air Capture Design and Operation with Power Market Volatility

Zhiyuan Fan; Elizabeth Dentzer; James Glynn; David S. Goldberg; Julio Friedmann; Bolun Xu

doi:10.1016/j.eng.2026.02.025

Engineering ›› :202602025 DOI: 10.1016/j.eng.2026.02.025

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Enhancing Profit and CO₂ Mitigation: Commercial Direct Air Capture Design and Operation with Power Market Volatility

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Abstract

Current decarbonization efforts are falling short of meeting the net-zero greenhouse gas (GHG) emission target, highlighting the need for substantial carbon dioxide removal methods such as direct air capture (DAC). However, integrating DACs poses challenges due to their enormous power consumption. This study assesses the commercial operation of various DAC technologies that earn revenue using monetized carbon incentives while purchasing electricity from wholesale power markets. We model four commercial DAC technologies and examine their operation in three representative locations including California, Texas, and New York in United States. Our findings reveal that commercial DAC operations can take financial advantage of the volatile power market to operate only during low-price periods strategically, offering a pathway to facilitate a cost-efficient decarbonization transition. The ambient operational environment such as temperature and relative humidity has non-trivial impact on abatement capacity. Profit-driven decisions introduce climate-economic trade-offs that might decrease the capacity factor of DAC and reduce total CO₂ removal. These implications extend throughout the entire lifecycle of DAC developments and influence power systems and policies related to full-scale DAC implementation. Our study shows that DAC technologies with shorter cycle spans and higher flexibility can better exploit the electricity price volatility, while power markets demonstrate persistent low-price windows that often synergize with low grid emission periods, like during the solar “duck curve” in California. An optimal incentive design exists for profit-driven operations while carbon-tax policy in electricity pricing is counterproductive for DAC systems.

Keywords

Direct air capture / Carbon dioxide removal / Profit-driven decarbonization / Climate-economic trade-off / Power market integration / Electricity price volatility / Climate change / Carbon incentive policy / Optimization / Carbon tax

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Zhiyuan Fan, Elizabeth Dentzer, James Glynn, David S. Goldberg, Julio Friedmann, Bolun Xu. Enhancing Profit and CO₂ Mitigation: Commercial Direct Air Capture Design and Operation with Power Market Volatility. Engineering 202602025 DOI:10.1016/j.eng.2026.02.025

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