Prospex Energy PLC, the AIM quoted investment company focused on European gas and power projects, is pleased to provide an update on the production and income from the El Romeral power plant in southern Spain ('El Romeral'). El Romeral continues to provide a very healthy income stream from selling electricity into the spot market in Spain. The Company holds a 49.9% working interest in El Romeral through its interest in Tarba Energía S.L. ('Tarba').
· El Romeral revenue for the quarter April to June 2022 was €925,134 (gross), down 12% compared with the previous quarter to March 2022 (€1,046,485)
· Peak electricity spot prices have levelled off when compared to the extreme prices experienced in March when gross income exceeded €500,000 in a single month
· Gas price cap imposed by the Spanish Government from mid-June has had a knock-on effect to electricity prices resulting in reduced volatility and peak prices seen in the electricity spot market
· Electricity spot prices averaged more than €180/MWhr in the quarter to April to June 2022
· Transition to full automation completed and since mid-March 2022 the power plant has been operating 24/7
· The plant is at 30% capacity with potential to increase output to up to 100% when infill wells are approved and drilled successfully
· Project Apollo, the installation of solar panels on the roof of the El Romeral facility to power ancillary services is underway and due to be fully commissioned in early August
· Project Helios, the renewable co-generation via a proposed 5 MW solar farm adjacent to El Romeral is at FEED stage
· Connection to the power grid at El Romeral is pre-existing and the grid network has ample capacity to export increased electricity output from the new photovoltaic generation, subject to permitting
Further information - Generation
The high income from electricity generation at the plant has been augmented by the ability of the plant to run 24-hour operations, 7 days a week. The operational and subsurface technical teams at Tarba have been working together closely to monitor the performance of the plant and the gas production with input from reservoir modelling. Electricity generation can be suspended if needed when electricity pool prices drop below breakeven prices. Tarba has cash in hand of more than €1,100,000. Gross electricity sales revenue for the quarter ended 30 June 2022 was €925,134 (gross).
Further information - Project Apollo
Project Apollo will result in increased sales of electricity. The cost of installation is less than €50,000 and has been financed from existing funds held by Tarba. Payback from this investment is estimated to be shorter than previously estimated at approximately two and a half years on account of higher electricity prices. A total of 83 photo-voltaic panels have been installed in three separate zones on the power plant roof giving a total installed peak capacity of 41.5 kWh. With the sunny climate of Andalusia, this is expected to generate 66 MWh in the first year. Energy generated from Project Apollo will feed the plant's ancillary services thus covering part of the plant's electricity demand during daylight hours allowing increased electricity sales.
Mark Routh, Prospex's CEO, commented:
"El Romeral continues to generate very healthy revenues with daily electricity spot prices averaging more than €180/MWhr in the quarter to 30 June 2022. The gas price cap imposed by the Spanish Government from mid-June has had a knock-on effect to electricity prices. Since Tarba produces its own gas from the El Romeral production concessions, it is not directly affected by the gas price cap, but that cap has reduced the number of extremely high within day prices and has limited the volatility and peak electricity spot prices seen in the previous quarter.
"Tarba remains ready to increase its gas to power generation capacity at El Romeral as soon as the permits to drill a portfolio of infill wells on the El Romeral concessions are received. Achieving 100% output capacity could be realised from the first two infill wells. A further increase of the plant's generation capacity by recommissioning the mothballed third generator would be possible in parallel with the drilling programme.
"I am extremely pleased to report that the first of our photovoltaic projects is about to be commissioned. Project Apollo will cover part of the plant's ancillary electricity usage, thus allowing increased income from the sale of power."