UK's Drax will pay $33 million after misreporting biomass data

Ofgem, the UK's energy regulator, said that Drax had misreported data regarding biomass imported from Canada. The company will pay Ofgem a voluntary redress fund of 33 million pounds (25 million pounds) for this mistake.

Drax is Britain's leading renewable energy generator. It has converted four coal-power plants to biomass, and operates hydropower projects.

The investigation found that Drax had inadequate data governance controls over biomass imported from Canada between April 1, 2021 and March 31, 2022, but did not find any evidence that the biomass failed to meet sustainability requirements.

Renewable power generators in Britain can receive certificates of renewable obligation that they can sell to energy providers who will then use them to market renewable electricity to their customers.

Ofgem stated that "the investigation found the misreported information was of a technical nature and would have had no impact on the level subsidy Drax received as part of the RO (renewable obligations) scheme."

Drax announced that it would resubmit the Canadian data from the reporting period of April 2023 through March 2024 and conduct an independent audit on its biomass profiling.

Will Gardiner, CEO of Drax Group, said in an independent statement: "We understand the importance in maintaining a solid evidence base. We continue to invest in order to improve our future reporting."

Drax claims that it uses only wood residues or byproducts of trees that are primarily used as lumber, and that the demand for wood from sustainably managed forests can increase forest growth.

Green groups have criticised this practice. They claim that it's not a form of renewable energy production and that the pellet production could contribute to deforestation.

The Ofgem redress fund helps charities to support vulnerable energy consumers.

(source: Reuters)