Ofgem carried out a 15-month investigation into Drax after it was accused of burning wooden from unsustainable sources and claims that it was taking timber from treasured uncommon forests in Canada.
The regulator mentioned in Might final yr that it was taking a look at whether or not Drax was in breach of “annual profiling reporting necessities regarding the Renewables Obligations scheme”, in addition to different associated issues.
Drax, which runs Britain’s greatest energy station close to Selby, receives hefty authorities subsidies for burning biomass wooden chips.
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There have been rising calls from environmental teams and campaigners to finish all subsidies for burning wooden from forests and vitality crops in energy stations and to not award vitality firms any new help or contracts to take action.
Ofgem mentioned, on closing the investigation, that Drax was discovered to have lacked the mandatory information governance and controls in place.
This meant it didn’t give the regulator correct and strong information on the kind of wooden it makes use of.
However Ofgem didn’t discover any proof that Drax’s biomass was not sustainable or that Drax had been issued renewables obligation certificates (ROCs) incorrectly.
Ofgem mentioned Drax pays £25 million to its voluntary redress fund because of the findings.
Ofgem chief govt Jonathan Brearley mentioned: “This has been a posh and detailed investigation.
“Vitality customers anticipate all firms, notably these receiving thousands and thousands of kilos yearly in public subsidies, to adjust to all their statutory necessities.
“There are not any excuses for Drax’s admission that it didn’t adjust to its obligatory requirement to present Ofgem correct and strong information on the precise varieties of Canadian wooden it utilises.
“The laws is evident about Drax’s obligations – that’s why we took powerful motion.
“Drax has accepted that it had weak procedures, controls and governance which resulted in inaccurate reporting of knowledge in regards to the forestry kind and sawlog content material getting used.”
He added: “Whereas Ofgem at the moment has no cause to imagine there have been additional cases of non-compliance, we gained’t hesitate to behave if required.”
The regulator mentioned Drax had “engaged constructively” all through the investigation.
Drax Group chief govt Will Gardiner mentioned: ““It’s welcome that Ofgem has discovered no proof that our biomass failed to fulfill the sustainability standards of the Renewables Obligation (RO) scheme, nor that the ROCs we acquired for the renewable energy we produced had been supplied incorrectly.
“Though Ofgem has famous there isn’t any proof to counsel Drax intentionally misreported its profiling information, we recognise the significance of sustaining a powerful proof base and are persevering with to speculate to enhance confidence in our future reporting.”
An Vitality Division (DESNZ) spokesman mentioned: “We anticipate full compliance with all regulatory obligations – customers rightly anticipate the very best customary of accountability from turbines.
“The scale of the redress cost underscores the robustness of the regulatory system and the requirement that turbines abide by each the spirit and the letter of the laws.”
However the US-based Pure Assets Defence Council (NRDC) mentioned the penalty was a “drop within the ocean”.
Matt Williams, senior advocate for the NRDC, mentioned: “This ruling exhibits how tough it’s to show that burning wooden from forests is sweet for the atmosphere.
“There’s one easy cause for that – it isn’t.
“The £25 million positive Drax have volunteered to pay is a drop within the ocean in comparison with the billions they’re asking for in new subsidies.
“The Vitality Secretary Ed Miliband should see – it’s not value paying much more of the general public’s cash to an organization that may’t play by the principles.”
