Drax Group (LSE:DRX) s to donate £25 million to power regulator Ofgem’s voluntary redress fund after a probe into sustainability claims for its biomass power plant found several profiling failings.
In recognition of Ofgem's findings, Drax said it would make the payment and also resubmit its 2020-21 profiling data for Canada and produce an independent audit of its biomass profiling data for the most recent reporting period, April 2023 to March 2024 (CP22).
The electricity generator had been accused of using wood cut down from forests in Canada as a feedstock for the plant, which environmentalists said was little better than burning coal.
Drax commented that Ofgem did not find any evidence that its biomass is not sustainable or that the company has been issued Renewable Obligation Certificates (ROCs) incorrectly.
The probe did find that Drax had process gaps in two aspects of its profiling data for Canada in the period April 2021 to March 2022 or CP20.
Annual profiling data covers 'additional biomass characteristics' and is not used for the issuing of ROCs, which are long-term price guarantees issued to renewable energy firms.
Drax Group (LSE:DRX) chief executive, Will Gardiner said: “Although Ofgem has noted there is no evidence to suggest Drax deliberately misreported its profiling data, we recognise the importance of maintaining a strong evidence base and are continuing to invest to improve confidence in our future reporting."
In the statement, Drax said Ofgem had noted the profiling issues were technical in nature and would not have impacted the level of ROCs earned by the FTSE 250 group under the Renewable Obligation scheme.
Drax acquired Pinnacle Renewable Energy in April 2021, which supplied 14% of biomass delivered to Drax Power Station during the CP20 period, adding it is “committed to continued development and improvement of its activities.”