Drax: Yorkshire power station operator to pay £25m after investigation finds data reporting issues

Ofgem said the investigation had found that Drax had an “absence of adequate data governance and controls” in place, and that this had contributed to the company misreporting data to Ofgem for the compliance period April 1 2021 to March 31 2022.

Ofgem said Drax, which receives large amounts of money from Government subsidies, had also been unable to provide the regulator with sufficient evidence on how its annual profiling submission had been arrived at.

The investigation found no evidence that Drax had been issued Renewable Energy Certificates incorrectly, or that the company deliberately misreported data. Ofgem chief executive, Jonathan Brearley, said that the investigation had been “long and complex”, adding: “Energy consumers expect all companies, particularly those receiving millions of pounds annually in public subsidies to comply with all their statutory requirements.

"There are no excuses for Drax's admission that it did not comply with its mandatory requirement to give Ofgem accurate and robust data on the exact types of Canadian wood it utilises.”

Biomass pellets are created from wood and burned in place of coal in order to produce power. Drax currently generates energy using biomass at four of its units in Selby, with its remaining two coal units closed down.

The sustainability of the wood used to create Drax’s pellets was previously brought into question by a BBC Panorama investigation. Drax maintains that its wood pellets are sustainably harvested.

Ofgem said its investigation found no evidence that Drax does not meet the Government’s rule that a minimum of 70 per cent of its biomass must come from sustainable sources in order for the company to receive funding.

Drax CEO, Will Gardiner, said: “We remain confident in the robust systems we have in place to demonstrate that the biomass we use at Drax Power Station meets the strict sustainability criteria set out in UK law.”

Mr Gardiner added that the period in question had been a “challenging time” for Drax due to the restrictions of Covid-19 and the acquisition of Pinnacle Renewable Energy.

He said: “Taken together, these factors will have made it harder than usual to report robustly. Nevertheless, Ofgem expects us to always hold robust data, and they are right to expect this. We have therefore accepted their findings and have agreed a voluntary redress payment, primarily to help consumers in vulnerable situations most at risk from cold homes and high energy bills.”

Drax has also agreed to resubmit its data for the period.

Mr Brearley added: "While Ofgem currently has no reason to believe there have been further instances of non-compliance we won't hesitate to act if required."