Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NET Power Inc (NPWR, Financial) is on track with its first utility-scale plant, expected to start between late 2027 and early 2028.
- The company is actively building out its project backlog in competitive power markets in the US and Canada.
- NET Power Inc (NPWR) has established strategic supply chain partnerships to meet growing demand for clean firm power.
- The company is targeting an LCOE of $60 per megawatt hour in many places across North America, making it competitive with other clean power alternatives.
- NET Power Inc (NPWR) has a strong balance sheet with approximately $609 million in cash and investments, providing financial stability.
Negative Points
- The first utility-scale plant will be the most expensive one NET Power Inc (NPWR) ever builds, which could impact initial profitability.
- Supply chain constraints in the power industry could pose challenges to the timely deployment of new plants.
- The company faces significant competition from other clean power solutions, including nuclear and renewable energy with battery storage.
- There are risks associated with the permitting process for new projects, which could lead to delays.
- The company's success is heavily dependent on the successful validation and performance of its technology at utility scale.
Q & A Highlights
Q: Do you envision any change in the timeline for Project Permian due to Zachry's financial issues?
A: No, there has been no impact on the FEED timeline. We are embedded in their office with our project team, and there has been no change to staffing or schedule. The FEED is progressing as per the original schedule. β Brian Allen, President, Chief Operating Officer
Q: Can you provide more detail about the sequestration partner for OP1?
A: Without getting into specifics, our partner has deep experience in the local geology and regulatory processes. This expertise is crucial for engaging with local communities and stakeholders. β Daniel Rice, Chief Executive Officer, Director
Q: Where are you in the process of selecting a power partner for OP1?
A: We have a lot of options, including traditional utilities and infrastructure capital. The growing demand for clean firm power, especially from data centers, offers unique opportunities for long-term PPAs. β Daniel Rice, Chief Executive Officer, Director
Q: How do you ensure the surety of your turbine supply with Baker Hughes in a growing demand environment?
A: We have a commercial committee partnership with Baker Hughes, focusing on long-term forecasting and securing a diverse supply chain. We are confident in their ability to meet our needs. β Brian Allen, President, Chief Operating Officer
Q: Is there any change to your strategy for monetizing originated projects given the tightening market for clean firm power?
A: We are considering larger-scale developments and fleet deployments to meet the growing demand. Origination could become a core staple of our business, enabling us to scale quickly. β Daniel Rice, Chief Executive Officer, Director
Q: Is it still possible for another project to slot in ahead of OP-1?
A: Yes, we have total flexibility in sequencing our projects. Alberta, in particular, is a highly economic market that could potentially leapfrog other projects. β Daniel Rice, Chief Executive Officer, Director
Q: Can you provide an update on your approach to financing the Project Permian plant?
A: We are waiting for the end of FEED to finalize the financing package. We are the first $200 million into the plant and are working on the financing strategy with our existing lender group. β Akash Patel, Chief Financial Officer
Q: Are there any brownfield site opportunities to accelerate originated projects?
A: Yes, brownfield sites are interesting due to existing interconnects. However, our focus is on optimizing for the lowest cost source of power, which may not always align with brownfield opportunities. β Daniel Rice, Chief Executive Officer, Director
Q: How is the permitting process going, and do you envision any delays?
A: We are mindful of industry delays and are being very thoughtful about siting projects close to existing infrastructure to avoid long permitting times. β Daniel Rice, Chief Executive Officer, Director
Q: What are your thoughts on the potential impact of a second Trump administration on the 45-Q tax credit?
A: The 45-Q has strong bipartisan support and was extended under the Trump administration. We believe NET Power's technology, which satisfies both energy and environmental goals, will continue to be supported. β Daniel Rice, Chief Executive Officer, Director and Akash Patel, Chief Financial Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
