Company: NPWR-WT
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001845437-25-000053
Chunk: 1

Company: NET Power Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 2
Chunk 1
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 adversely affect our results of operations, financial condition and prospects.

Specifically, on July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”), a large piece of tax and spending legislation that has specific material effects for Net Power’s intended SN1 project and future pipeline. The OBBBA preserved the core elements of the 45Q tax credit for carbon sequestration and use, including eligibility for programs to efficiently monetize the credits (i.e., direct pay and transferability). The OBBBA also created parity in 45Q credit value for carbon emissions used in enhanced oil recovery (“EOR”); eligible projects capturing carbon emissions for EOR that would have previously been eligible for a $60/ton credit will now be eligible for the full value of $85/ton. Net Power expects this increase in credit value to materially improve the economics for projects capturing emissions for EOR, strengthening economics for projects specifically in the Permian Basin and improving the pathway for broad commercialization of the Net Power technology, including projects capturing carbon emissions for permanent sequestration. The OBBBA included additional other provisions with expected fewer material effects on Net Power projects and indirect effects on the broader market for clean power; the full implications of those changes are not yet clear.

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Additionally, the Trump Administration has started the process to change regulations on new natural gas-fired power plants. Currently, the U.S. Environmental Protection Agency’s regulations for new gas turbines that run above a 40% capacity factor require such facilities to meet a 90% capture rate by 2032. These regulations were proposed to be repealed on June 11, 2025. The implications of the potential repeal of these regulations are uncertain at this time, but we do not expect such repeal to have a material impact on the market for Net Power’s technology.

Commencing Commercial Operations

Over the next several years, Net Power plans to conduct additional research and equipment validation testing campaigns at its Demonstration Plant. In 2024, Net Power began purchasing initial long-lead materials for its first utility-scale power plant (“SN1”) with the intention of locating SN1 in the Permian Basin of West Texas (“Project Permian”). However, after completing the front-end engineering and design (“FEED”) process in December 2024, the indicative cost estimate at that time was higher than originally anticipated. In response, during the first quarter of 2025, Net Power commenced a post-FEED optimization and