KPMG report found Drax did not breach sustainability rules, Ofgem reveals

Last year, Drax agreed to pay £25m after a probe by Ofgem found that the company had failed to properly report data on the types of wood it uses for its biomass pellets.

As part of this, the company commissioned a report from consultancy KPMG to assess it was complying with regulations.

This was first mentioned by independent MP Rosie Duffield in the House of Commons at PMQs, who claimed that the report showed “Drax claimed those subsidies illegally”.

Shadow Energy Secretary Andrew Bowie also asked for details of the report, after the Government had agreed a new subsidy arrangement with the company.

Now, the regulator has said: “Ofgem is aware that questions have been raised around whether the KPMG reports contain evidence that Drax was in breach of its sustainability obligations and therefore wrong to receive Renewables Obligation funding.

“Ofgem has reviewed the reports in detail and did not find evidence to support this.”

It added: “The investigation did not find any evidence suggesting that Drax does not meet the government’s threshold that a minimum of 70 per cent of biomass must come from sustainable sources in order to receive scheme funding.” 

A Drax spokesperson said: “In its investigation Ofgem found no evidence that our biomass failed to meet the sustainability criteria of the RO scheme, nor that the Renewables Obligations Certificates we received for the renewable power we produced had been provided incorrectly.

“Its new statement on the reports we commissioned from KPMG, as well as the prior comments in a Public Accounts Committee hearing by Ofgem’s Director of Audit and Compliance, confirm that it reviewed these documents as part of its investigation and found no evidence within them that we were in breach of our sustainability obligations and therefore wrong to receive RO funding.”