Ofgem has found that Drax Power Limited lacked adequate data governance and controls, leading to inaccuracies in its annual profiling submission for the compliance period from 1st April 2021 to 31st March 2022.
Specifically, Drax misreported data related to forestry type and sawlog proportions for Canadian consignments and was unable to provide sufficient evidence to support the accuracy of its data reporting.
In response to these findings, Drax has accepted the investigation’s conclusions and agreed to pay £25 million to Ofgem’s Energy Industry Voluntary Redress Fund.
The company will re-submit its profiling data for the 2021-2022 compliance period and has updated its policies and procedures related to data reporting.
Drax will also commission an independent audit of its international supply chain data for the compliance period from 1st April 2023 to 31st March 2024.
Ofgem will oversee this audit, which aims to ensure the accuracy of future reporting.
The findings of the audit will be made public.
Ofgem confirmed that there is no evidence suggesting Drax received Renewable Obligation Certificates (ROCs) incorrectly or failed to meet sustainability thresholds for biomass sourcing.
Ofgem Chief Executive Jonathan Brearley said: “This has been a complex and detailed investigation.
“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.
“The legislation is clear about Drax’s obligations – that’s why we took tough action.”
A spokesperson for the Department for Energy Security and Net Zero said: “We expect full compliance with all regulatory obligations – consumers rightly expect the highest standard of accountability from generators.
“The size of the redress payment underscores the robustness of the regulatory system and the requirement that generators abide by both the spirit and the letter of the regulations.
“The detail of the investigation and subsequent findings are a matter for Ofgem.”
