Drax Group (LSE:DRX) is set to come under renewed scrutiny as MPs prepare to vote on whether to extend government subsidies for biomass power generation, including more than £10 billion expected to be paid to the Yorkshire company by 2027.
The move comes amid calls from environmental groups and energy analysts for greater transparency over Drax’s fuel sourcing practices and the release of a key sustainability report.
A delegated legislation committee will decide on Monday whether to approve plans that would continue support for biomass operators, including Drax’s North Yorkshire power station, which is the UK’s largest.
The current scheme is expected to have delivered £10 billion to the company under the Renewable Obligation framework, though earlier this year a new agreement saw subsidies halved for the following five year period to 2031.
Campaigners have urged ministers to make future support conditional on the publication of a KPMG audit, which reviewed Drax’s sourcing and was submitted to both Ofgem and the Department for Energy Security and Net Zero.
Ofgem has confirmed that it found no evidence of a breach of sustainability rules during its investigation, though Drax has previously paid a £25 million penalty for inaccurate subsidy data.
Drax has defended its operations, pointing to Ofgem’s findings and stating that its biomass meets recognised sustainability standards.
The company's own emails, uncovered in a Financial Times investigation, indicated that wood sourced from ecologically significant forests in Canada was "highly likely" to have been used as fuel.
The company maintains that biomass plays a crucial role in providing dispatchable, renewable power.
The Department for Energy Security and Net Zero in February halved the amount of support for Drax, with no subsidies paid for "anything less than 100% sustainably sourced biomass".