DOE Terminates $3.7B in Clean Energy Grants, Dissolves Demo Office
March 1, 2026 · 2 min read
Jared Klein
The Department of Energy has terminated 24 awards from the Office of Clean Energy Demonstrations totaling $3.7 billion, marking the largest single cancellation of clean energy grant funding in the agency's history. The office itself received zero funding in the FY2026 spending bill.
What Was Cut
Secretary of Energy Chris Wright announced the terminations affect projects primarily in carbon capture and sequestration and decarbonization initiatives. DOE determined the projects "failed to advance the energy needs of the American people, were not economically viable and would not generate a positive return on investment of taxpayer dollars."
Nearly 70% of the cancelled projects — 16 of 24 — were signed between Election Day and January 20, 2025. The administration has separately cancelled $7.6 billion in clean energy grants across 16 states.
The Broader Budget Redirect
The FY2026 Energy and Water appropriations bill codifies the shift. OCED receives $0, down from its prior-year appropriation. The bill also reprograms $5.164 billion in unobligated Infrastructure Investment and Jobs Act funds, redirecting money originally earmarked for carbon dioxide transportation infrastructure ($1.5B), regional direct air capture hubs ($1.04B), the Civil Nuclear Credit Program ($1.28B), and carbon capture programs ($950M).
Meanwhile, DOE's Office of Science rises to $8.4 billion and Nuclear Energy climbs to $1.785 billion — signaling where the department wants researchers to focus next.
Two Protections Active Grant Holders Should Know
Despite the cancellations, the FY2026 bill includes two provisions that matter for existing grantees. Agencies cannot terminate awards based solely on changed program priorities — a direct legislative response to the wave of terminations. And indirect cost rates must be maintained at fiscal year 2024 levels, protecting university overhead reimbursements.
Researchers with active OCED-funded projects should contact their contracting officers immediately. For those pivoting to new proposals, the shift toward nuclear and basic science represents where DOE intends to spend. Granted can help identify alternative federal, state, and foundation funding across the new landscape. Detailed analysis of the FY2026 energy budget is available on the Granted blog.