As it pushes forward $950 million plans to build a clean energy plant in Texas, Durham’s Net Power has secured another $275 million in capital tied to its pending SPAC deal – a combination that could transform the startup into the region’s next public company.
And it could also make a difference in the global fight against climate change as the plant, planned for Ector County, Texas, is being billed as the “world’s first large-scale gas-fired power facility with near-zero emissions."
The latest capital commitment is tied to the proposed SPAC combination between Net Power and Rice Acquisition Corp. II, which would take Net Power public.
In a press release Tuesday, the companies said Occidental Petroleum (NYSE: OXY) has increased its commitment to the PIPE – private investment in public equity – by another $250 million, bringing its ownership stake in the combined company to 39 percent.
Danny Rice, soon-to-be CEO of Net Power when the deal closes, said in an interview Tuesday that the additional dollars further validate the potential of the technology, which is pivoting from the proof phase toward commercialization with that first plant, scheduled to come online in 2026.
"After 2026, after that first plant is online, that's when we go into what we call manufacturing mode," he said. Armed with a standardized plant design, the firm hopes to start deploying them throughout the globe – and is already getting interest from potential partners, Rice said.
“There’s been a ton of interest from a wide variety of potential customers for this technology,” he said.
When the SPAC deal was announced late last year, Rice called the technology at play “a total game changer for global power generation.”
In a PIPE, an institutional investor buys stock directly from a public company below market price. PIPEs are way to provide additional capital, on top of the funds raised in a SPAC IPO.
The latest move brings Occidental’s total investment to $350 million.
The Rice family has committed an additional $25 million to the PIPE, bringing its total investment to $125 million.
The new commitments, according to the companies, bring the expected gross proceeds of Net Power’s combination with Rice Acquisition Corp. to $845 million. That’s made up of $345 million from Rice Acquisition’s trust account and about $500 million from the PIPE (raised at $10 per share of common stock). If no Rice Acquisition Corp. shareholders exercise redemption rights, the combined company would have a market capitalization of more than $2 billion.
Net Power, in the release, stated that the $200 million in net proceeds will fully fund corporate operations through commercialization of its first utility-scale plant.
Net Power was founded in 2010 and grew the technology from a theoretical concept to reality with the financial help of investors Occidental, Constellation, Baker Hughes and Durham-based 8 Rivers, which invented the underlying Net Power technology.
The Rice family is coming off success with its first SPAC, Rice Acquisition Corp. 1, which acquired renewable gas producer Archaea – later acquired by oil giant BP (NYSE: BP) in a $4.1 billion deal, including debt.