NET Power's Q4 2024: Unpacking Contradictions in CapEx, Regulatory Challenges, and Global Market Focus

These are the key contradictions discussed in NET Power's latest 2024 Q4 earnings call, specifically including: CapEx Fluctuations and Cost Reduction Strategies, Regulatory Environment Impact, CapEx Expectations and Cost Deflation, and International Market Priorities:



Challenge in Cost Estimation:
- NET Power reported total installed costs for Project Permian to be between $1.7 billion and $2 billion, an approximately 100% increase since the last CapEx forecast.
- The increase was attributed to market challenges, tight global energy supply chains, and site-specific factors unique to West Texas.

Technological Advancements:
- NET Power completed the FEED for Project Permian, with no technical fatal flaws identified.
- The company successfully achieved mission on demand at its La Porte demo facility, accumulating over 140 fired hours.
- These advancements are essential steps towards commercializing clean gas power technology.

Initiatives for Cost Reduction:
- NET Power is focusing on post-FEED optimization and value engineering to reduce costs for Project Permian.
- The company is exploring modular multi-unit feasibility studies for Gulf Coast projects to achieve further cost reductions.
- These efforts aim to lower the total installed costs to a more competitive level for clean firm power solutions.

Impact of Inflationary Pressures:
- Combined cycle gas turbines (CCGTs) are facing cost increases, with estimates rising from $1,100 per kW to $2,200 per kW.
- This inflation is also impacting NET Power's cost structure, but the company is focusing on strategic cost reductions through multi-plant initiatives and modularization.