Net Power Inc. · NYSE:NPWR
Net Power — SPAC Merger (December 2022)
61 slides from Net Power's SPAC merger presentation, December 2022
Slide 1: NET Power PIPE Presentation
NET Power PIPE Presentation December 2022
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) This presentation is being furnished solely for the purpose of considering a potential transaction involving Rice Acquisition Corp. II (“RONI”) and NET Power, LLC (“NET Power”). By accepting this presentation, the recipient acknowledges and agrees that all of the information contain
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) The independent auditors of NET Power have not audited, reviewed, compiled, or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, did not express an opinion or provide any other form of assurance with re
Slide 4: Introduction
Introduction DIRICE G7 nerrower
Slide 5: Introduction to the Team
Introduction to the Team Consistent track record of creating shareholder value across the natural gas value chain Danny Rice Kyle Derham Charles Burrus Ryan Kanto President and Director Head of M&A and Strategy Chief Engineer Chief Executive Officer Partner at Rice Investment Group Partner at Ri
Slide 6: Executive Summary
+ Reliable, Low-Cost, Clean Energy from Natural Gas Executive Summary
Slide 7: NET Power Decarbonizes Natural Gas Power Generation
NET Power Decarbonizes Natural Gas Power Generation 1 Transaction: Business combination of Rice Acquisition Corp II (“RONI”) and NET Power (“NPWR”) at $1.5bn EV with $235 million of investment commitments from the Rice family, Occidental Petroleum (“Oxy”) (1), and other existing and new investors. 2
Slide 8: Use natural gas. Generate reliable electricity. Capture emissions. Change the world.
Use natural gas. Generate reliable electricity. Capture emissions. Change the world.
Slide 9: An Innovative Technology to Decarbonize Natural Gas Power Generation
An Innovative Technology to Decarbonize Natural Gas Power Generation Developed by industry leaders for the last 10 years, ready to scale Company Overview NET Power is a clean energy technology company that invents, develops and licenses a proprietary process (the “NPWR Cycle”) designed to efficien
Slide 10: Attractive and Differentiated Investment Opportunity
Attractive and Differentiated Investment Opportunity 6 Business Model: NPWR is an asset-light technology licensor with a substantial and growing intellectual property portfolio. Each utility scale license = ~$65mm of PV-10 to NPWR (1). 7 Market & Impact: >1,300 NPWR plants in the U.S. or >17,000 NPW
Slide 11: Investment Thesis
+ Reliable, Low-Cost, Clean Energy from Natural Gas Investment Thesis
Slide 12: Illustrative Transaction Summary
1 Illustrative Transaction Summary Expected Sources & Uses Illustrative Pro Forma Valuation Sources $mm $mm Cash in RONI Trust (1) $335 Share Price $10.00 Rice Friends & Family Investment (2) $100 (x) Pro Forma Shares Outstanding (3) 199 OXY Investment $100 Pro Forma Equity Value $1,994 Additional P
Slide 13: Global Electricity Demand Expected to Increase 2-3x by 2050
2 Global Electricity Demand Expected to Increase 2-3x by 2050 Demand electrification is a key tenet of Global Electricity Generation (TWh) decarbonization (e.g., electric vehicles, HVAC, industrial applications) 2020 2050 Forecasts (1) 93,384 Electrification along with increased energy consumpti
Slide 14: 24/7 Carbon Free Energy Enables a Reliable, Low-Cost, Clean Grid
2 24/7 Carbon Free Energy (CFE) Enables a Reliable, Low-Cost, Clean Grid A grid made up solely of variable renewable energy (VRE) like wind and Cost of Electricity in a Low Carbon Grid ($/MWh)(2) solar is expected to be prohibitively expensive and unreliable 24/7 Carbon Free Energy (“24/7 CFE”)
Slide 15: We Formed RONI to Scale 24/7 CFE & Address Staggering Underinvestment
2 We Formed RONI to Scale 24/7 CFE & Address Staggering Underinvestment Consensus Firm, Low-Carbon & Other Climate Plan EVs Electrify Everything Grids and Firm, Low-Carbon & Other Energy (Renewables + Batteries) Storage Supply Side Technologies Carbon Geothermal Nuclear Capture Energy Market Efficie
Slide 16: U.S. Shale Gas Is a Reliable, Low-Cost and Long-Lived Resource
3 U.S. Shale Gas Is a Reliable, Low-Cost and Long-Lived Resource 2005-2020 Shale Gas Transforms U.S. Natural Gas Market Represents ~80% of total U.S. NG supply #1 producer of natural gas in the world +50% increase in supply since 2012 LNG Exports 100 U.S. Natural Gas Production by Source (1) 9
Slide 17: Natural Gas is a Proven, Scalable Solution to Reduce Emissions
3 Natural Gas is a Proven, Scalable Solution to Reduce Emissions Natural gas contributes ~38% of U.S. power generation today – a 2x increase from 20 years ago; coal market share decreased from ~51% to ~22% over the same time period U.S. Electricity Generation by Source (1) Natural Gas Replaces >200
Slide 18: However, Today, Natural Gas Is Not Considered a Standalone 24/7 CFE Option
4 …However, Today, Natural Gas Is Not Considered a Standalone 24/7 CFE Option Combined Cycle Gas Turbines (“CCGTs”) without carbon U.S. CO2 Emissions From Energy Consumption (mmtpa) (4) capture deliver reliable, baseload power generation at $39- Total Emissions (1973 to 2021) Emissions By Major So
Slide 19: The NET Power Cycle Transforms Natural Gas Into 24/7 CFE
5 The NET Power Cycle Transforms Natural Gas Into 24/7 CFE Life-Cycle Analysis (LCA) emissions of various power generation technologies (1) 1,095 Natural gas Lighter blue shading for transformed from solar and wind reflects "bridge fuel” +33 gCO2e/KWh impact of Carbon Intensity (g CO2e/KWh) 753 to “
Slide 20: NET Power Cycle Overview
5 NET Power Cycle Overview NET Power uses natural gas and oxygen, produces power and captures CO2 (Video Link) NET Power Cycle Overview NET Power Cycle Steps NET Power’s platform uses a semi-closed loop cycle that inherently 1 Air Separation Unit separates oxygen from air captures CO2 and produc
Slide 21: NPWR's Oxy-Combustion Cycle Is the Key to Low-Cost Carbon Capture
5 NPWR’s Oxy-Combustion Cycle Is the Key to Low-Cost Carbon Capture The NPWR Cycle inherently captures CO2 to deliver power generation 70% cleaner than post-combustion carbon capture from traditional natural gas power generation plants Combined Cycle Gas Turbine (“CCGT”) + Carbon Capture NPWR (2) vs
Slide 22: NET Power's Supercritical CO2 Test Facility Validates the Technology
5 NET Power’s Supercritical CO2 Test Facility Validates the Technology Three separate testing campaigns completed between 2018-2021 provide technology validation Key Highlights Facility Overview Supercritical CO2 turbine generated power while synchronized to the grid NET Power’s first-of-its-kin
Slide 23: NET Power's Intellectual Property Underpins its Licensing Model
6 NET Power’s Intellectual Property Underpins its Licensing Model Intellectual Property Portfolio Details Intellectual Property Areas of Focus Growing portfolio of trade secrets and patents protects NPWR as it While patents and trade secrets already provide a substantial existing moat, licenses the
Slide 24: Project Economics Support Commercialization
6 Project Economics Support Commercialization NET Power provides low-cost, reliable 24/7 CFE relative to other technologies, and best in class Levelized Cost of Energy (“LCOE”) results in compelling project economics LCOE with IRA Subsidies ($/MWh) (1) NET Power Gen 2 Project Economics (IRR %) (2) $
Slide 25: Nimble, Asset-Light and Capital-Light Business Model
6 Nimble, Asset-Light and Capital-Light Business Model Focus on innovation and IP with wide competitive moat and business model that facilitate profitable growth Licensing Business Model NET Power’s Competitive Advantages Technology-driven IP moat, engineering and demonstration facility enable NET
Slide 26: Replacing Baseload + Electrification = Massive Global TAM
7 Replacing Baseload + Electrification = Massive Global TAM TAM defined by replacing retiring baseload power generation and meeting new demand from electrification Expected Baseload Retirement and Implied Electrification of Demand Through 2050 (TWh) (1) 42,865 28,597 14,268 11,016 3,252 778 899 1,57
Slide 27: NET Power: Significant Impact to Decarbonization
7 NET Power: Significant Impact to Decarbonization NET Power is expected to be the low-cost CCUS solution and solves one of the biggest challenges: a scalable, reliable, economical replacement for traditional coal and gas fired power plants Cost of Capture vs. U.S. Annual CO2 Emissions, by Sector (1
Slide 28: Baker Hughes Partnership Catalyzes NET Power's Commercialization
8 Baker Hughes Partnership Catalyzes NET Power’s Commercialization BH partnership brings capital, technology expertise and strong track record of new product launches Baker Hughes (“BH”) invested cash equity into NET Power and is partnering with NET Power to develop and commercialize the technolog
Slide 29: Multiple Projects in Development with Intent to be Early Adopters
8 Multiple Projects in Development with Intent to be Early Adopters 2 3 Net Zero Target (1) National Law / Policy 4 5 Actively Under Consideration 1 6 Select Projects Currently # in Development NET Power Demonstration Facility 1 2 3 4 5 6 Wilhelmshaven Green NPWR Led Consortium Project Whitetail Ene
Slide 30: Consortium Project Designed to Significantly De-Risk Serial Number 1 (SN1)
8 Consortium Project Designed to Significantly De-Risk Serial Number 1 (SN1) Highly supportive shareholders with significant resources and capital Potential Location and Anticipated Timeline Project Highlights Site location in West Texas with ~300 MWe of capacity Limited permitting needs given p
Slide 31: Customer Pipeline Driven by Inbound Interest
8 Customer Pipeline Driven by Inbound Interest Received unsolicited interest across industries including oil & gas, national oil companies, utilities, steel, chemicals and technology Multiple utilities have included or are evaluating including NET Power in integrated resource plans (IRPs) NET
Slide 32: 3-Year Project Lifecycle Could Lead to Rapid Deployment
8 3-Year Project Lifecycle Could Lead to Rapid Deployment Public Project Participants and Supporters Non-Public Engaged Parties Parties representing over two dozen deployments with either completed, underway or requested feasibility studies or similar engagement, including: • Top 5 U.S. oil and gas
Slide 33: Recently Passed Climate Bill (IRA) Expected to Accelerate NPWR Adoption
8 Recently Passed Climate Bill (IRA) Expected to Accelerate NPWR Adoption Macro systems modeling performed by the REPEAT Total U.S. Power Generation (TWh) – REPEAT Project (1) project (1) highlights over 67 GW of NGCC with CCS could be constructed by 2035 incentivized by the 6,000 Inflation Reduct
Slide 34: Capital-Light Business Model Can Drive Substantial EBITDA Generation
8 Capital-Light Business Model Can Drive Substantial EBITDA Generation Key Assumptions Illustrative EBITDA ($mm) Sensitivity at Various # of Plants Deployed Per Year (1) Licensing Revenue (per plant): $30mm over initial 3 years $3,500 Graph showcases annual NPWR Expect to receive $10mm at FID, $
Slide 35: Highly Attractive Valuation Relative to Prior Funding Rounds
9 Highly Attractive Valuation Relative to Prior Funding Rounds NET Power has raised ~$237mm in cash since 2012 across four investments from industry-leading strategics NET Power Valuation Catalysts Since 2021 Private Round BH partnership progressed: De-risks turbomachinery development, solidifies
Slide 36: SPAC Valuation Offers a Compelling Entry Point Relative to Comps
9 SPAC Valuation Offers a Compelling Entry Point Relative to Comps Comparable Public “Category-Defining” Companies Market 24/7 CFE – Natural Gas 24/7 CFE – Advanced Nuclear CCUS – Post-Combustion Carbon Capture Ticker NYSE: NPWR NYSE: SMR OSLO: ACC NO Product, services and delivery business Carbon c
Slide 37: The Rice Team Has Consistently Created Value in Natural Gas
10 The Rice Team Has Consistently Created Value in Natural Gas Through multiple cycles, as Founders, Operators and Investors, the Rice Team has generated top returns across four dominant public companies spanning the natural gas value chain Natural Gas Producer Natural Gas Midstream Largest Natural
Slide 38: NET Power Is A Winning Solution For All Stakeholders
NET Power Is A Winning Solution For All Stakeholders Environment: NET Power transforms natural gas into a truly clean energy source that can further reduce global emissions at the multi-gigaton scale with minimal land use and mining intensity compared to wind and solar with batteries. Power Producer
Slide 39: NET Power Delivers The Energy Trifecta
NET Power Delivers The Energy Trifecta RELIABLE LOW-COST CLEAN 24/7 ~$30 ~60 24 hours/day, 7 days/week Levelized Cost of Energy ($/MWh) Life Cycle Emissions (gCO2e/KWh) Baseload, Dispatchable, Peaking ~33% below Combined Cycle Natural Gas ~90% below Combined Cycle Nat Gas Complements Variable Renewa
Slide 40: Appendix
Appendix DIRICE G7 nerrower
Slide 41: The History of NET Power
The History of NET Power >$230mm invested since 2010, with extensive diligence performed with each successive partnership validating the technology and strengthening path to commercialization Investors and Business Milestones (1) Founded NET Power in 2010 Petrochemical engineering, Extensive p
Slide 42: Current Owners Are Industry Leaders and Retain Significant Ownership
Current Owners Are Industry Leaders and Retain Significant Ownership NET Power shareholders representing ~65% of pro forma ownership are industry leaders in sales, manufacturing, operations, services, and offtake for power generating assets and natural gas / CO2 infrastructure Shareholder Enterprise
Slide 43: Flexible Technology Provides Tailored Solutions for Multiple Designs & Use Cases
Flexible Technology Provides Tailored Solutions for Multiple Designs & Use Cases NET Power Plants can Run… NET Power Plants can be Configured as… NET Power Plants can Dispatch as… Acid O2 CH4 Gas On Multiple Fuel Types Without Water A Utility-Scale Plant An Industrial-Scale Plant A Baseload Plant A
Slide 44: Built In Liquid-Oxygen Battery Provides Peaking Flexibility
Built In Liquid-Oxygen “Battery” Provides Peaking Flexibility Liquid Oxygen Battery Concept NET Power Plant Configuration NET Power’s fuel is a combination of natural gas & oxygen Air Natural Gas A Oxygen (O2) is typically generated on-site by powering an Air Separator Unit (“ASU”) with electricity
Slide 45: Governments Support NPWR Commercialization and Projects
Governments Support NPWR Commercialization and Projects NET Power projects benefit tremendously from the new $85/tonne 45Q in the Inflation Reduction Act of 2022 (IRA) as well as various government funding programs and regulatory standards Source Category Description Impact to NPWR • 45Q enhancement
Slide 46: NET Power Plants Dispatch at Far Lower Prices than NGCC
NET Power Plants Dispatch at Far Lower Prices than NGCC Overview NPWR vs. CCGT LCOE ($/MWh) (1) – Investment Decision $60 Higher natural gas prices generally lead to higher $52 electricity prices $40 $40 $39 We expect NPWR plants to generate sufficient 45Q tax credits to offset nearly all natura
Slide 47: NET Power's Advantaged Tech Could Catalyze CO2 Transportation Sector
NET Power’s Advantaged Tech Could Catalyze CO2 Transportation Sector CO2 Capture, Transport and Storage Cost ($/tonne) (1) CCUS Cost Considerations NET Power’s oxy-combustion process captures CO2 at scale, resulting in low-cost CCUS technology 45Q sequestration = $85/tonne We expect NPWR to anch
Slide 48: CO2 Storage Is Abundant, Proven and Safe
CO2 Storage Is Abundant, Proven and Safe CCS storage is abundant, with ~13,000 Global Prospective CO2 Storage and CCS Hubs (1) NPWR Plant Equivalents (1)(2) gigatons of prospective storage Storage NPWR Plant globally(1) Country (Gigatons) Equivalents United States 8,062 310,924 This is enough ca
Slide 49: Responsibly Sourced Gas Decreases Methane Emissions
Responsibly Sourced Gas (“RSG”) Decreases Methane Emissions RSG Overview US Natural Gas Production vs. US Methane Emissions (2) Natural gas and petroleum systems are the second largest source of methane emissions in the U.S. behind agriculture 125 800 Natural gas production From 1990 to 2020, to
Slide 50: Reference: Spark Spreads
Reference: Spark Spreads US Spark Spread Futures ($/MWh) (1) $100 $80 $80 $70 $70 $75 $60 High $60 (Pac Northwest) Peak $50 $50 $50 Flat-Time $40 $40 $30 Weighted Avg. Off-Peak $30 $25 $20 Low (ERCOT) $20 $10 breakeven spark spread = ~$6(2) $10 $0 – 2022 2023 2024 2025 2026 2027 2028 – 2022 2023 202
Slide 51: RONI's Independent Directors are Engineers and Entrepreneurs
RONI’s Independent Directors are Engineers and Entrepreneurs Directors’ skill-set and experience in the oil and gas industry are well-suited to the NET Power opportunity Founder & CEO of Alpha Capital Partners, a vertically integrated private equity real estate firm Vice President of Production
Slide 52: Appendix – Project Details
Appendix — Project Details »IRICE @ NETPOWER
Slide 53: Serial Number 1 (SN1) Strategy
Serial Number 1 (SN1) Strategy SN1 Selection Process SN1 Deployment Strategy Wilhelmshaven NET Power led project in alignment with Baker Hughes Joint NPWR Led Consortium Project Whitetail Green Energy Hub Development Program Project Coyote Project Broadwing G2 LNG Project Pre-qualify and select
Slide 54: Project Whitetail
Project Whitetail Project Partners and Highlights Project Location Teesside, UK 300 MWe Class NET Power plant (local O2 supply; no integrated ASU) to be located at multi-occupancy industrial facility with existing infrastructure that supports facility’s needs Access to world-class geologic CO2 s
Slide 55: Wilhelmshaven Green Energy Hub
Wilhelmshaven Green Energy Hub Project Partners and Highlights Project Location Wilhelmshaven, 300 MWe Class NET Power plant developed by Tree Energy Solutions (“TES”), in Germany partnership with Engie, in Wilhelmshaven, Germany Headquartered in Belgium, TES is a world-scale green hydrogen comp
Slide 56: Project Coyote
Project Coyote Project Partners and Highlights Project Location Southern Ute Indian Reservation, Colorado 300 MWe Class NET Power plant to be located on a brownfield site on the southwestern portion of the Southern Ute Indian Reservation Developed by the Southern Ute Indian Tribe Growth Fund, Ak
Slide 57: Project Broadwing
Project Broadwing Project Partners and Highlights Project Location Decatur, Illinois 300 MWe Class NET Power plant to be located adjacent to Archer Daniels Midland’s processing complex in Decatur, IL Leverages an existing, on-site Class VI carbon storage well Plant is part of the Broadwing Cle
Slide 58: G2 NET-Zero
G2 NET-Zero Project Partners and Highlights Project Location Southwestern Louisiana 300 MWe Class NET Power plant to be located in the G2 Energy Export Complex The Complex is an $11B facility which is being designed to profitably generate responsible electricity and a variety of affordable produ
Slide 59: Risk Factors (1/3)
Risk Factors (1/3) Risks Related to Our Financial Position and Need for Additional Capital •We have incurred significant losses since inception and we anticipate that we will continue to incur losses in the future, and we may not be able to achieve or maintain profitability. •We may be unable to man
Slide 60: Risk Factors (2/3)
Risk Factors (2/3) •Despite implementing and maintaining industry standard security measures and controls, the website, systems, and data we maintain may be subject to intentional disruption, other security incidents, or alleged violations of laws, regulations, or other obligations relating to data
Slide 61: Risk Factors (3/3)
Risk Factors (3/3) Risks Related to Intellectual Property •We are developing NET Power-owned intellectual property, but we rely heavily on the intellectual property we have in-licensed which is core to the NET Power Process. The ability to protect these patents, patent applications and other proprie