NPWR makes public debut

CARBON-FREE ENERGY

NET Power and Rice SPAC complete merger and NPWR makes public debut

• NET Power and Rice Acquisition Corp. II have completed their merger, forming NET Power Inc.

• NET Power’s technology generates clean, affordable, and reliable energy with near-zero emissions.

• The combined company has an enterprise value of approximately $1.5 billion.

• The Class A common stock of NET Power began trading on the New York Stock Exchange under the ticker symbol “NPWR” on June 9, 2023.

• The transaction has provided more than $675 million in gross proceeds, including $540 million from PIPE capital and $135 million from RONI’s trust account.

• The funds will be used to support corporate operations and accelerate the deployment of NET Power’s patented technology.

• Existing strategic investors, including Occidental, Baker Hughes, Constellation, and 8 Rivers, have rolled 100% of their equity into the combined company.

• NET Power has upsized its PIPE capital, started the Front End Engineering and Design for its first utility-scale project, and announced a joint venture with SK Group.

• The technology offers decarbonized baseload power and supports net-zero ambitions.

• Global deployment of affordable, reliable, and clean power is crucial for accelerating carbon reductions and achieving climate goals.

LOW-CARBON FUELS

Canadian biofuels producers eye US over home country

• Canadian biofuels producers are considering building their next projects in the United States to take advantage of rich subsidies for clean fuel.

• This move could cost Canada C$10 billion ($7.5 billion) of investment and undermine Prime Minister Justin Trudeau’s efforts to build a greener economy.

• Fuel retailer Parkland canceled a renewable diesel plant in British Columbia due to competition concerns about the U.S. Inflation Reduction Act (IRA).

• The IRA, signed into law by U.S. President Joe Biden, aims to cut carbon emissions across the U.S. economy.

• Canada’s proximity to the United States makes it particularly vulnerable to potential competition from cheaper U.S. biofuels.

• The lack of similar financial support in Canada, combined with negative incentives such as a carbon tax, is driving companies to consider investments in the United States.

• Canadian companies may have to charge higher prices for their fuel compared to U.S. producers, and they could face difficulties in sourcing feedstocks used in production.

• Biofuels companies are urging the Canadian government to increase support, including investment tax credits and de-risking mechanisms.

• The government plans to seek feedback on possible new supports and is expected to provide an update later this year.

• Canadian executives believe there is room for more government support in Canada to compete effectively with the United States.

FUNDRAISING

BlackRock eyes $7 billion fund

• BlackRock aims to raise up to $7 billion for its fourth Global Renewable Power Fund.

• The fund will focus on projects in OECD countries, including solar, wind, batteries, and grid infrastructure.

• There is growing demand from institutional investors to support climate-friendly investments.

• Investors are seeking to align their portfolios with the transition to a low-carbon economy.

• The United States and European Union’s financial backing for clean energy has contributed to the increased demand.

• Pension schemes are particularly interested in assets that match their long-term liabilities.

• Despite some pushback from U.S. Republicans, institutional investors remain committed to investing in both current and future infrastructure.

• The fourth fund targets $5 billion to $7 billion, following the successful $4.8 billion raise for its predecessor.

• The International Energy Agency estimates that annual clean energy investment needs to triple to $4 trillion by the end of the decade to reach net-zero emissions by 2050.

• Previous investments by the fund include high-power charging network IONITY and the Waratah Super Battery in Australia.

• The fund aims to make 18-22 investments across early stage and developed projects, with potential for co-investments.

• Roughly one-third of the fund is likely to be invested in Europe, the Americas, and Asia, although there are no set targets.

INDUSTRIAL DECARBONIZATION

Rio Tinto and China Baowu extend partnership to decarbonize steel

• China Baowu and Rio Tinto have extended their climate partnership to decarbonize the steel value chain.

• They have signed a Memorandum of Understanding (MoU) to explore new projects in China and Australia.

• The companies plan to advance specific decarbonization projects to play a leading role in the industry’s low-carbon transformation.

• The projects include the research and demonstration of a pilot-scale electric melter for low-carbon steel making, optimization of pelletization technology for low-carbon shaft furnace-based direct reduction, expansion of China Baowu’s HyCROF technology to mitigate CO2 emissions, and the study of low-carbon iron production in Western Australia.

• The collaboration is an outcome of the longstanding partnership between Rio Tinto and China Baowu.

• Both companies will share resources and expertise to progress each initiative.

• The partnership aims to address the challenge of developing a low-carbon pathway for low-to-medium grade iron ores.

• The commitment of China Baowu aligns with their mission of promoting green development and addressing climate change.

• Rio Tinto and China Baowu have a history of collaboration on project development, technology research, and emissions reduction in the steel industry.

RENEWABLES

CubicPV raises $103 million to make silicon wafers in the US

• Solar energy parts manufacturer CubicPV has raised $103 million to build a U.S. factory for making silicon wafers, key components of solar panels.

• The investment was led by the clean energy arm of Thai conglomerate SCG, with additional funding from existing investors Hunt Energy Enterprises and Breakthrough Energy Ventures, backed by Bill Gates.

• CubicPV aims to pioneer domestic wafer manufacturing and plans to complete a 10 gigawatt factory in 2024, with the location to be announced this year.

• Currently, China produces about 98% of the world’s wafers, and the U.S. seeks to reduce its reliance on imports to achieve President Joe Biden’s clean energy and climate change goals.

• Some solar manufacturers pushed for federal rules mandating domestic wafer production to qualify for new subsidies, but the U.S. Treasury Department did not impose such requirements.

• CubicPV’s equity financing demonstrates investor support for its plan to manufacture wafers in the United States.

• The company has named Dave Gustafson, formerly VP of commercial manufacturing at Bridgestone, as the president of its wafer facility.

• The initial $33 million of the investment is available immediately, with the remaining funds tied to undisclosed project milestones.