No. of Recommendations: 16
Thanks for sharing that NetPower presentation. I am interested in the technology area of reducing CO2 emissions so I just spent an enjoyable hour going through the presentation. It was well crafted and they've obviously put a lot of effort into developing it. I was impressed. It describes a high potential for future profits, primarily by licensing fees and royalty payments.
My Dad taught me many lessons about human nature. One was if a piece of bait looked really tempting, try to spot the fishhooks it may contain. So this was in my mind as I read the presentation. On a quick first pass, I noted three possible ones.
The first is buried in the Risks Assessment attached to the presentation. It states:
"Our test facility has not overcome all power loads so as to provide net positive power delivery to the commercial grid during its operation. If initial commercial plants using the NET Power Process are unable to efficiently provide a net power output to the commercial grid, it will negatively impact our business." Pretty important hurdle.
The next was the availability of sufficient equipment (and other) supplies needed to support their ambitious plans. They spent a lot of time spelling this out in the Risks section. Somewhat like the questions of their being enough lithium, other rare metals, etc. copper mines, and other supplies to enable EV's to displace ICE's at the rates many project. Or build the wind farms needed to displace hydrocarbons with electricity.
As one example, OXY's semi-commercial scale DAC plant startup has been delayed until 2025 by equipment delays. They still have a lot of potential operating issues to overcome and cost reductions to achieve. Yet their CEO is claiming 70-100 commercial plants by 2035. Seems premature. Process development can have many pitfalls.
The third is the ability to protect their technology. The use of oxygen to replace air in burning natural gas to produce power is a neat idea. It produces a high concentration CO2 stream and H20 as emissions. This makes it much easier to capture and dispose/utilize the CO2. After all, the problem with hydrocarbon fuels is the combustion products with dilute CO2. Otherwise, they have high energy content, are easy to transport and store, and are a cheap source of energy. That's why the Industrial Revolution happened. But the idea of using oxygen is hardly novel in itself - see rocked fuels, etc. OXY is using it in the cement plant that is part of their DAC process for the same reasons. NetPower claims patents but also acknowledge they may be challenged. HOw narrow are the patents and what will be the economics be to contest them? NetPower will still have first mover advantages - how long can they hold up?
I'm not saying that NetPower may not be a good investment opportunity. I so say don't assume it's a developed technology or will remain unique.
