Slide 1: NET Power Analyst Day
NET Power Analyst Day March 2023
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) This presentation is being delivered by Rice Acquisition Corp. II ("RONI") and NET Power, LLC ("NET Power") for informational purposes only. This presentation does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) Non-GAAP Financial Measures. 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 ot
Slide 4: Analyst Day Agenda
9:00am Executive Summary Danny Rice – Incoming Chief Executive Officer 9:30am Technology Brock Forrest – Chief Technology Officer 10:00am Economics & Business Model Akash Patel – Chief Financial Officer Analyst Day 10:30am Break Agenda 10:45am Commercialization Brian Allen – President and Chief Oper
Slide 5: Introduction
Introduction DIRICE G/ nerrower
Slide 6: Introduction to the Team
Introduction to the Team World-class operators and innovators in industry and technology Danny Rice Kyle Derham Brian Allen Chief Executive Officer, RONI and Incoming Chief Executive Officer President and Chief Operating Officer Incoming Board Member, NPWR Partner at Rice Investment Group Partne
Slide 7: Executive Summary
Executive Summary Danny Rice Incoming Chief Executive Officer 7
Slide 8: The Rice Team Has Consistently Created Value in Natural Gas
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 Gas
Slide 9: An Innovative Technology to Decarbonize Natural Gas Power Generation
An Innovative Technology to Decarbonize Natural Gas Power Generation NET Power’s power plant transforms natural gas into clean, emission-free power NET Power Overview Who we are: NET Power is a US-based clean energy technology company that has developed a gas-fired power plant that generates clean
Slide 10: Aging Baseload Power Plants Near CO2 Storage = NET Power Opportunity
Aging Baseload Power Plants Near CO2 Storage = NET Power Opportunity Approximately 500 GW of natural gas, coal and nuclear retirement candidates are within 40 miles of CO 2 storage U.S. Market Offers Favorable Characteristics CO2 Storage and Baseload / Dispatchable Power Plants (4) U.S. Baseload Ret
Slide 11: 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) (2) – Investment Decision We expect NPWR plants to generate $60 sufficient 45Q tax credits to offset $52 $40 nearly all natural gas fuel costs $40 $39 $3.50/MMBtu Nat Gas cost = $22/MWh $20 $21 $85/tonn
Slide 12: 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 13: Technology
Technology Brock Forrest Chief Technology Officer 13
Slide 14: NET Power Cycle Overview
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 1 Air Separation Unit separates oxygen from air inherently captures CO2 and produces
Slide 15: NET Power Cycle Efficiency
NET Power Cycle Efficiency NPWR plants yield competitive thermal efficiencies NET Power Cycle Efficiency Efficiency Waterfall and Peer Comparison Thermal efficiency of a heat engine is the percentage NPWR Gen 1 Target Efficiency Waterfall of heat energy that is transformed into work A natural ga
Slide 16: NPWR's Oxy-Combustion Cycle is Key to Low-Cost Carbon Capture
NPWR’s Oxy-Combustion Cycle is 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. CCGT
Slide 17: NET Power's Supercritical CO2 Test Facility Validates the Technology
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 Power NET Power’s first-of-its
Slide 18: 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 and oxygen Air Natural Gas A Oxygen (O2) is typically generated on-site by When peaking, powering an Air Separator Unit (“ASU”)
Slide 19: 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… O2 Acid Gas CH4 On Multiple Fuel Types Without Water A Utility-Scale Plant An Industrial-Scale Plant A Baseload Plant A
Slide 20: NET Power's Intellectual Property Underpins its Licensing Model
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 te
Slide 21: Economics & Business Model
Economics & Business Model Akash Patel Chief Financial Officer 21
Slide 22: Nimble, Asset-Light and Capital-Light Business Model
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 P
Slide 23: Project Economics Support Commercialization
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) Aft
Slide 24: Gen 1 & Gen 2 Modeled Plant Assumptions
Gen 1 & Gen 2 Modeled Plant Assumptions Criteria NET Power Gen 1 Plant (1) NET Power Gen 2 Plant (2) EPC: $600 - $770 EPC: $320 - $490 Owners Costs + Contingencies: $120 - $150 Owners Costs + Contingencies: $70 - $100 Assumed CAPEX ($mm) Upfront License Fee: $30 Upfront License Fee: $40 Total Capex:
Slide 25: Capital-Light Business Model Can Drive Substantial EBITDA Generation
Capital-Light Business Model Can Drive Substantial EBITDA Generation Key Assumptions Illustrative EBITDA ($mm) Licensing Revenue (per plant): $30mm over initial 3 years Sensitivity at Various # of Plants Deployed Per Year (1) Expect to receive $10mm at FID, $10mm during construction and $10mm at
Slide 26: Replacing Baseload + Electrification = Massive Global TAM
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 1,575 3,252 778 899
Slide 27: Commercialization
Commercialization Brian Allen President and Chief Operating Officer 27
Slide 28: Baker Hughes Partnership Catalyzes NET Power's Commercialization
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 technology
Slide 29: Consortium Project Designed to Significantly De-Risk Serial Number 1 (SN1)
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 pla
Slide 30: Customer Pipeline Driven by Inbound Interest
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 Po
Slide 31: Origination Strategy Can Kickstart Development and Create Value
Origination Strategy Can Kickstart Development and Create Value Project origination activities can de-risk projects and accelerate development leading to (1) license fees to NET Power ($65mm PV-10 per project) and (2) retained ownership in projects and highly strategic CO2 infrastructure Limited
Slide 32: Supply Chain Strategy To Support Ramp-Up In Deployments
Supply Chain Strategy To Support Ramp-Up In Deployments Turboexpander (Baker Hughes) Heat Exchanger Balance of Plant • Exclusive licensed supplier for turboexpander • Primary licensed supplier identified • Licensed supplier list to include control systems and other turbomachinery and technology • In
Slide 33: NPWR's Standardized Plant Design Provides Multiple Benefits
NPWR’s Standardized Plant Design Provides Multiple Benefits NPWR’s plant is built upon the principles of standardization, enabling scale, operational and environmental advantages Standardization Highlights NET Power Plant Configurations (1) Standardized design for lower costs, faster delivery times,
Slide 34: Valuation & Funding
Valuation & Funding Kyle Derham Chief Executive Officer, RONI and Incoming Board Member, NPWR 34
Slide 35: Illustrative Transaction Summary
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 PIP
Slide 36: Highly Attractive Valuation Relative to Prior Funding Rounds
Highly Attractive Valuation Relative to Prior Funding Rounds NET Power has raised ~$237mm in cash since 2012 across four investments from industry-leading strategics NET Power Valuation Catalysts Since 2021 Private Round BH partnership progressed: De-risks turbomachinery Post-Money development, so
Slide 37: Capital-Light Business Model Can Drive Substantial EBITDA Generation
Capital-Light Business Model Can Drive Substantial EBITDA Generation Key Assumptions Illustrative EBITDA ($mm) Licensing Revenue (per plant): $30mm over initial 3 years Sensitivity at Various # of Plants Deployed Per Year (1) Expect to receive $10mm at FID, $10mm during construction and $10mm at
Slide 38: SPAC Valuation Offers a Compelling Entry Point Relative to Comps
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 Business model Technology licensor business model
Slide 39: DeSolve Scenario Analyses Shows Significant Deployment in the U.S.
DeSolve Scenario Analyses Shows Significant Deployment in the U.S. DeSolve Overview NPWR Potential Cumulative Installed Capacity (GW) DeSolve is a consulting firm led by Dr. Jesse Jenkins, who leads 700 Potential for >$50bn of PV10 licensing Princeton University’s energy systems research lab fees
Slide 40: 24/7 CFE for Direct Air Capture (DAC) = NET Power Fleet Opportunity
24/7 CFE for Direct Air Capture (DAC) = NET Power Fleet Opportunity DAC Integration with NPWR Overview OXY DAC Deployment Scenarios Estimated # of Plants Online (2) OXY is a leader in the development of Direct Air Capture through their partnership with DAC technology extracts CO2 directly from t
Slide 41: Q&A
Q&A DIRICE G/ nerrower
Slide 42: Appendix
Appendix DIRICE G/ nerrower
Slide 43: Super-Critical Thinking: Harnessing the Unique Powers of CO2
“Super-Critical” Thinking: Harnessing the Unique Powers of CO2 Supercritical CO2 can be found in every step of the NPWR process, from generating power to enabling more pore space capacity • When temperature and pressure are above its critical point (88F and 1070 psi), CO2 exists as a supercritical f
Slide 44: Recently Passed Climate Bill (IRA) Expected to Accelerate NPWR Adoption
Recently Passed Climate Bill (IRA) Expected to Accelerate NPWR Adoption Macro systems modeling performed by the REPEAT Total U.S. Power Generation (TWh) – REPEAT Project (1) project (1) highlights over 67 GW of NGCC with CCS could be constructed by 2035 incentivized by the 6,000 Inflation Reductio
Slide 45: NET Power's Advantaged Tech Could Catalyze CO2 Transportation Sector
NET Power’s Advantaged Tech Could Catalyze CO2 Transportation Sector CO2 Capture, Transport and Storage Cost ($/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 46: 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 47: 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 48: 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 49: CO2 Storage Is Abundant, Proven and Safe
CO2 Storage Is Abundant, Proven and Safe CCS storage is abundant, with Global Prospective CO2 Storage & CCS Hubs (1) NPWR Plant Equivalents (1)(2) ~13,000 gigatons of prospective storage globally(1) Storage NPWR Plant Country (Gigatons) Equivalents This is enough capacity to store the lifetime CO2
Slide 50: 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 m
Slide 51: 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 52: 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 propri