netpower(US:NPWR)2025-08-12 13:30Financial Data and Key Metrics Changes - The energy market is experiencing unprecedented demand, with PJM capacity auction prices rising to $329 per megawatt per day, an 11x increase over two years [5][6] - Project Permian's Levelized Cost of Electricity (LCOE) has improved from over $150 per megawatt hour to under $100 per megawatt hour [15][19] Business Line Data and Key Metrics Changes - The integration of gas turbines with the net power cycle is expected to double power output while halving emissions compared to standalone gas turbines [12][14] - The net power cycle converts nearly 80% of the BTU energy from natural gas into electricity, with approximately half of this power used for auxiliary load [8][9] Market Data and Key Metrics Changes - The market is signaling a need for reliable power solutions due to rising intermittency in local grids and long interconnect queues [5][6] - Corporate sustainability goals are increasingly competing with reliability and affordability concerns in the energy market [5] Company Strategy and Development Direction - The company aims to provide a credible pathway to decarbonize while meeting immediate power needs through the integration of gas turbines and the net power cycle [6][14] - Future projects will focus on establishing reliable power generation first, followed by the integration of net power technology to enhance decarbonization [27][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operational progress and the potential for future deployments, emphasizing the importance of securing off-take agreements [18][81] - The company is focused on disciplined execution and cost control as it moves forward with Project Permian and other initiatives [18][19] Other Important Information - The company has made significant progress in value engineering, reducing costs related to pipe quantities and ASU equipment [17][19] - The recent One Big Beautiful Bill Act tax legislation has positively impacted LCOE by allowing full depreciation of qualifying assets in year one and increasing CO2 utilization credits [19][45] Q&A Session Summary Question: Timing and milestones for SN1 or other projects - Management indicated that the ERCOT interconnect for Project Permian is expected to be ready for first power by mid-2028, with the net power plant potentially coming online in 2029 or 2030 [26][27] Question: Behind the meter opportunities with the new integrated approach - The integration of gas turbines allows for co-location opportunities, providing reliable power generation while establishing a pathway for decarbonization [31][32] Question: Trade-offs in performance or plant operation for value engineering savings - Minor equipment reductions were made without sacrificing overall reliability, focusing on optimizing costs through design adjustments [40][41] Question: Impact of 45Q parity on addressable market - The parity for CO2 utilization enhances the economic viability of projects in the Permian, making it a compelling location for first-of-a-kind technology [42][45] Question: Turbine market availability and vendor readiness - The company is exploring flexible generation options with smaller gas turbines, which are expected to be available for deployment by early to mid-2028 [50][52] Question: Changes to the business model with the new design - The integrated product enhances the business model, allowing for flexibility in project development and licensing while maintaining a modular approach [69][70] Question: Cost trajectory to achieve $100 per megawatt - The company aims to achieve a standalone net power unit cost of $1.2 to $1.3 billion, enabling an LCOE below $100 per megawatt hour through future deployments [73][76] Question: Cash burn expectations and committed payments - The company expects to maintain a cash position of around $340 million by the end of the year, focusing on securing off-take agreements to support future financing [80][81] Question: Timeline for securing an off-take agreement - Management aims to secure off-take agreements as soon as possible, with a focus on achieving FID for the gas turbine piece within the next 60 to 120 days [85][86]