Supply chain challenges will delay the world’s first utility-scale gas plant with carbon capture, Net Power executives announced Tuesday.
The clean energy technology company unveiled plans last November to build the natural gas plant in Texas’ Ector County, with expectations that the facility would be online in 2026. Project Permian would generate electricity with nearly zero emissions, according to Net Power.
But on an earnings call Tuesday, Net Power President Brian Allen told investors that the date has slipped to “sometime between the second half of 2027 and first half of 2028.”
“We believe this updated schedule will allow us to accomplish safe, clean and reliable operations and enable this project to serve as the catalyst for all future NET Power plant deployments,” said Allen, who is also the company’s chief operating officer.
Allen attributed the delay to “global energy supply chain” challenges, which he said had caused “extensive lead times across critical components.” The company previously adjusted the cost of the project to approximately $1 billion, up from an initial price tag of between $750 and $950 million.
Net Power’s technology produces electricity by combusting natural gas with pure oxygen, creating water and carbon dioxide — most of which is recirculated back into its power generation system. Excess high-purity CO2 can then be sold to industry or sequestered underground, according to Net Power. The company plans to use Occidental Petroleum’s existing infrastructure near Odessa, Texas, to move trapped CO2 to a permanent storage location.
Occidental is a major supporter of Net Power, investing at least $350 million in the startup since it was founded in 2010.
On an earnings call in May, Occidental CEO Vicki Hollub said Net Power’s technology is “really the only source of emission-free power technology that uses hydrocarbon gases.”
Net Power’s plant will provide power for Occidental’s oil and gas operations, Hollub said, and “then in the future, it will be one of the emission-free power sources that we use for our direct air capture units.”
Will Fitzgerald, an Occidental spokesperson, said Project Permian would not be used for Stratos, the direct air capture facility that’s under construction outside of Odessa. Occidental has entered into an agreement with Origis Energy to provide zero-emission solar power for Stratos, he said.
“We intend to power DAC plants with zero or very low-emissions power and anticipate a variety of sources will be needed including wind, solar and potentially other types depending on location and technology development in the coming years,” Fitzgerald said in an email Tuesday.