Drax to pay fine of £25m after it was found to have failed to report accurate data on the type of material it burned at its site in North Yorkshire.
As previously reported on this web site, Britain’s biggest power station, which provides about 5% of the UK’s electricity, receives large government subsidies for burning biomass wood chips.
However, the energy regulator Ofgem led a 15-month investigation into the firm after it was accused of using wood from unsustainable sources. Ofgem concluded that Drax had “no excuses” for giving “inaccurate” information and would pay £25m to its voluntary redress fund as a result of the findings, which represents 1% of its stock market value. The company will also have to pay for an external audit of its wood pellet supply chain to prove the accuracy of its future reporting. This is not regarded as an onerous condition and may just be the ‘cleaning up’ its act to secure the company’s 2027-2030 subsidies – a small matter for energy secretary Ed Milliband.
The regulator carried out its investigation after Drax was accused of burning wood from unsustainable sources and claims that it was taking timber from precious rare forests in Canada. Jonathan Brearley, the regulator’s chief executive, said: “the legislation is clear about Drax’s obligations – that’s why we took tough action”.
Drax has accepted that it had weak procedures, controls and governance which resulted in inaccurate reporting of data about the forestry type and saw log content being used.
However, Drax said there was “no evidence” it had “deliberately misreported” data. More from the BBC on that here.
Image credit: “Cooling Towers Drax Selby North Yorkshire #dailyshoot #drax” by Leshaines123 is licensed under CC BY 2.0.