Prospex begins first solar diversification project at El Romeral

Prospex Energy announced on Friday that the first of two projects in solar generation diversification at the El Romeral power plant in southern Spain had started.

The AIM-traded firm holds a 49.9% working interest in El Romeral through its interest in Tarba Energía, with the remaining 50.1% working interest owned by the ASX-listed Warrego Energy.

Installation work to place solar panels on the roof of the power plant was approved by Tarba earlier in June, and was expected to be completed by the end of July.

Project Helios, the second solar generation project, would meanwhile involve the installation of photo-voltaic panels on land adjacent to the plant.

Front-end engineering and design studies for Project Helios were approved by Tarba earlier in the year, and had now begun.

El Romeral was providing a “very healthy” income from selling electricity on the spot market in Spain, the board reported.

Following the gas price cap instituted by the Spanish government in mid-June, daily electricity prices were expected to average €150 per MWh for the next 12 months.

The El Romeral power plant was now operating 24 hours a day, seven days a week, “optimising” its revenue.

“We identified the opportunity for solar co-generation last year, so it is extremely satisfying to be proceeding with these two projects which increase the sale of electricity and boost the environmental, social and governance (ESG) credentials of Tarba and its owners, both Prospex and Warrego,” said chief executive officer Mark Routh.

“The installation of solar panels on the roof of the El Romeral power plant is a very fast and cost-effective way to increase our income at the plant whilst we await the approvals to drill further wells on the El Romeral production concessions.

“The installation of a solar farm adjacent to the plant will take longer and will be of greater scale but indications are that it will be value accretive and will enjoy short payback, made easier because of the existing grid connection and ample export capacity at El Romeral.”

Routh said that since the gas available from the producing wells on the El Romeral concessions allowed only one of the three generators to be active at a time, the plant was at 30% of its capacity.

“Receiving the permits to drill just two of the many identified structures on the existing concessions can take the capacity of the plant back to 100% of its design capacity.”

At 1100 BST, shares in Prospex Energy were up 0.22% at 4.46p.

Reporting by Josh White at Sharecast.com.