NET Power (NYSE:NPWR) said it is redirecting its near-term development strategy toward unabated, behind-the-meter natural gas generation as prospective customers prioritize rapid access to reliable power for data centers and other large loads.
Chief Executive Officer Danny Rice said the company spent the past four months engaging with prospective power buyers, including hyperscalers, data-center developers and industrial companies. The consistent message, he said, was that customers need “speed, scale, and reliability” and are willing to pay a fair price for those attributes amid constraints on power supply and grid interconnections.
Project Permian Redesign Focuses on Co-Located Load
Project Permian is being redesigned to serve co-located customer demand, with the ability to add carbon capture in later phases if customer requirements, economics and financing support it. Rice said the site could support roughly 1 gigawatt to 1.5 gigawatts of generation across multiple phases, while the initial phase will be sized according to current customer contracting demand.
The company said it intends to pursue off-grid or behind-the-meter generation that does not rely on the broader power grid or an interconnection queue. Rice said grid constraints have become increasingly prominent not only in PJM and MISO, but also in ERCOT, where he said interconnection queues are extending into the 2030s.
Rice said the company believes the West Texas location offers advantages for both near-term gas generation and a potential future carbon-capture retrofit. The project remains near high-voltage transmission lines that could enable a future grid connection, he said. NET Power also continues to work with Occidental Petroleum, or Oxy, on land rights and retains a potential future pathway to sell captured carbon dioxide for enhanced oil recovery.
“We build the power first,” Rice said, “and we capture when it makes sense.”
Reliability Design Combines Multiple Generation Technologies
President and Chief Operating Officer Marc Horstman said NET Power is targeting “three nines” reliability, or 99.9% uptime, for its behind-the-meter projects. The company’s contemplated configuration includes battery energy storage, reciprocating engines and gas turbines, designed with redundancy so that maintenance or an outage at one unit would not interrupt customer supply.
Horstman said the company’s modeling indicates that a single large generation unit would not meet a 99.9% uptime target because planned maintenance by itself could exceed the allowable outage window. A portfolio of smaller units, he said, can provide the necessary redundancy.
NET Power is working with a potential customer to secure an additional 120 megawatts of gas-power equipment with early delivery. Combined with gas turbines it has already secured, the company said this could bring secured capacity for the first phase of the larger project to nearly 200 megawatts.
Rice said the company is technology-agnostic in evaluating the eventual project configuration and will seek the combination of turbines, reciprocating engines and battery storage that can deliver the lowest-cost reliability on the customer’s required timeline.
Carbon Capture Option and Entropy Relationship Remain
While the initial Project Permian deployment is not expected to include carbon capture, NET Power said it is discussing a revised framework with Entropy under which Entropy’s post-combustion carbon-capture technology could be deployed in later stages of NET Power projects.
Rice said the company does not want customers to pay for clean power before they request it, but intends to retain the engineering capabilities and project locations needed to decarbonize its facilities later. He said the company sees carbon capture as a longer-term differentiator once power supply and demand become more balanced.
Horstman said post-combustion capture needs to be integrated into project planning, but it can be added after an initial power build. He said the company’s work with Entropy over the past several months has helped it understand how to design facility layouts that preserve a “legitimate path forward” for future clean-energy deployment.
Funding and Commercial Process
Chief Financial Officer Lee Shuman said NET Power ended the second quarter with approximately $310 million of cash equivalents and investments and no debt. The company said its current cash resources are sufficient for ongoing operations, Project Permian development activities and portions of the project equipment.
However, financing construction through commercial operations will require project-level financing, partner capital, additional equity, or a combination of those sources, Shuman said.
Rice said the company is seeking to limit speculative equipment commitments and is working to align prospective customers before making further major capital commitments. He said NET Power expects to take a “thoughtful” and “pragmatic” approach to securing equipment and financing while continuing discussions with potential offtakers and partners.
The company did not provide a specific timetable for an offtake agreement, though Rice said NET Power hopes to have more to share in the coming months. He said the company expects grid and power constraints to persist at least into the early 2030s in faster-moving markets, with a more conservative scenario extending constraints to the middle of the next decade.
About NET Power (NYSE:NPWR)
NET Power, Inc is an energy technology company focused on developing and commercializing power generation plants that burn natural gas and other fuels with near-zero carbon emissions. The company’s core innovation is the proprietary Allam-Fetvedt Cycle, a supercritical carbon dioxide power cycle that captures all carbon dioxide produced during combustion without the need for separate carbon capture systems. By integrating gas combustion, heat exchange and carbon dioxide separation into a single closed-loop process, NET Power aims to deliver baseload power with efficiencies and emissions profiles competitive with conventional and renewable generation sources.
Since demonstrating its first full-scale Allam-Cycle facility in La Porte, Texas, NET Power has moved from pilot operation toward commercial deployment.
