Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NET Power Inc (NPWR, Financial) has initiated Phase 1 of its equipment validation program with Baker Hughes at the La Porte facility, marking a critical step towards utility-scale technology development.
- The company announced Air Liquide as the air separation supplier for Project Permian FEED, a significant milestone in their plant design standardization.
- NET Power Inc (NPWR) sees a large market opportunity for 24/7 low-carbon energy, with potential for up to 2,000 plants in North America, focusing on areas with CO2 storage and infrastructure.
- The company is progressing with Project Permian, expected to come online in 2027/2028, positioning them to capture demand ahead of other solutions.
- NET Power Inc (NPWR) is developing an extensive shadow backlog of projects, ensuring visibility into future deployments and supporting the MISO interconnect process with a 300-megawatt capacity.
Negative Points
- The company anticipates continued inflation in capital equipment and construction costs, which may impact the previously provided guidance of $1.1 billion for Project Permian.
- NET Power Inc (NPWR) is still in the early stages of commercializing its technology, with the first utility-scale plant yet to be financed and operational.
- There is uncertainty regarding the future of 45Q tax credits, which are crucial for the economic viability of carbon capture projects.
- The company faces challenges in integrating multiple NET Power plants on a single site, including cost savings and operational complexities.
- NET Power Inc (NPWR) is heavily reliant on North American markets, with international opportunities still in the early stages of exploration.
Q & A Highlights
Q: Can you discuss the opportunities and challenges of integrating multiple NET Power plants on a single site, including potential cost savings and technical considerations?
A: Daniel Rice, CEO, explained that deploying multiple plants together in a fleet configuration offers significant cost savings and aligns with market demand for concentrated power growth. Brian Allen, COO, added that there are construction savings from duplicating powertrains and shared infrastructure like control rooms, which do not need to be duplicated.
Q: How is NET Power addressing capital equipment inflation, and which components are most affected?
A: Daniel Rice, CEO, noted that inflation is impacting large engineered equipment like heat exchangers and turbomachinery. Brian Allen, COO, mentioned that while they anticipate increases in bulk materials, they are still negotiating prices and have strategies to manage costs.
Q: Can you elaborate on the oxygen storage opportunity and its economic implications?
A: Daniel Rice, CEO, highlighted that the oxygen storage capability is customizable and can provide significant economic value by offering peaking power to the grid. Brian Allen, COO, explained that the storage size can be adjusted based on application needs, and it acts as a low-cost long-duration energy storage solution.
Q: Are there concerns about potential changes to the 45Q tax credit under the new administration?
A: Daniel Rice, CEO, expressed confidence that carbon capture incentives like 45Q will remain intact due to their bipartisan support and alignment with fossil fuel development goals. He emphasized the importance of carbon capture in decarbonizing the power sector.
Q: What is the international opportunity for NET Power, and how does it compare to North America?
A: Daniel Rice, CEO, stated that while North America remains the primary focus due to its favorable market conditions, there is growing interest in regions like Australia and the Middle East. However, challenges such as access to low-cost natural gas and CO2 sequestration need to be addressed in these markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
