Great Britain’s Office of Gas and Electricity Markets (Ofgem), an independent energy regulator, on Aug. 29 closed its investigation into Drax’s biomass profiling data, confirming it did not find any evidence that the company’s biomass is not sustainable or that Drax had been issued with Renewable Obligation Certificates (ROCs) incorrectly. Drax has agreed pay £25 million&nbsp;into Ofgem's voluntary redress fund related to technical errors in profiling data for Canada between April 2021 and March 2022.&nbsp;Ofgem in May 2023 <a href="https://biomassmagazine.com/articles/ofgem-probes-draxs-compliance-with-ro-reporting-requirements-20081">announced</a> it had opened an investigation into whether Drax Power Ltd. was in breach of annual profiling requirements related to the U.K. Renewable Obligations (RO) scheme.The RO scheme came into effect in Great Britain during 2002 with the goal of encouraging generation of electricity from eligible renewable sources. Under the scheme, electricity suppliers are required to present to Ofgem a specified number of ROCs per megawatt hour (MWh) of electricity supplied to their customers. These obligations can be met by presenting ROCs, making a payment into a buy-out fund, or a combination of the two. ROCs are issued to operators of accredited renewable generating stations for the eligible renewable electricity that they generate. Operators are able to trade ROCs with other parties, or sell them directly to suppliers.The RO scheme requires stations fueled with solid biomass, bioliquids and/or biogas that have a capacity of 1 MW or more to report against and meet particular sustainability criteria in order to be eligible for ROCs. The sustainability criteria include land criteria, which focuses on the land from which the biomass is sourced, and greenhouse gas (GHG) criteria, which accounts for the lifecycle GHG emissions of the biomass. According to Ofgem, the land and GHG criteria were both developed based on the requirements imposed by the European Commission via the Renewable Energy Directive.Data related to the land and GHG criteria must be submitted to Ofgem monthly. Bioenergy producers are also required to submit annual profiling data that includes information on the sustainability characteristics of their fuel, including type of biomass, form of biomass, country of origin and whether it was wood or derived from wood. Bioenergy producers are also required to commission an independent sustainability audit report on an annual basis and submit it to Ofgem. The audit aimed to verify the sustainability information that has been submitted by the operator, according to statements made by Ofgem last year.In its Aug. 29 announcement, Ofgem said its investigation was not focused on the issuance of ROCs to Drax and its findings do not suggest that there would have been any impact on the level of subsidy Drax received under the RO scheme.&nbsp;The annual profiling data that was the subject of the investigation is the reporting of “additional biomass characteristics” and is not used for issuing ROCs, Ofgem explained.&nbsp;The investigation did conclude that there was an absence of adequate data governance and controls in place that contributed to Drax misreporting data in relation to its annual profiling submission to Often for the compliance period spanning April 1, 2021, through March 31, 2022. The investigation also found that Drax was unable to provide Ofgem with sufficient evidence demonstrating how its annual profiling submission for that time period has been arrived at and unable to support the reliability of its profiling data reporting of forestry type and sawlogs for Canadian consignment for that same period. These reporting issues amounted to two breaches under U.K. regulations.&nbsp;"Therefore, whilst we have not found evidence to suggest deliberate misreporting, having considered the available evidence we have concluded that Drax failed in complying with its profiling data obligations under the RO scheme,” Ofgem said in its announcement.&nbsp;In a statement also released Aug. 29, Drax noted it acquired Pinnacle Renewable Energy in April 2021. Pinnace represents the majority of Drax’s activity in Canada and approximately 14% of the biomass delivered to Drax Power Station during the April 2021- March 2022 time period.&nbsp;“The Group is committed to continued development and improvement of its activities, and since the acquisition of Pinnacle Drax has invested to deliver improvements, which it believes have enhanced its overall reporting,” Drax said in its statement.&nbsp;Drax stressed that it has fully cooperated with Ofgem and that no harm has been caused to the consumer. In recognition of Ofgem’s findings, however, Drax said it will pay&nbsp;£25 million&nbsp;into Ofgem's voluntary redress fund. Drax will also resubmit its April 2021 – March 2022 profiling data for Canada and produce an independent audit of its biomass profiling period, which spans from April 2023 to March 2024.&nbsp;"It is welcome that Ofgem has found no evidence that our biomass failed to meet the sustainability criteria of the Renewables Obligation (RO) scheme, nor that the ROCs we received for the renewable power we produced had been provided incorrectly,” said Drax Group CEO Will Gardiner. “Although Ofgem has noted there is no evidence to suggest Drax deliberately misreported its profiling data,&nbsp;we recognize the importance of maintaining a strong evidence base and are continuing to invest to improve confidence in our future reporting."

2024-08-29 - Ofgem’s Drax investigation finds no harm to consumers, Drax agrees to pay £25M into voluntary redress fund (Biomass Magazine)

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Ofgem closed its investigation into Drax’s biomass profiling data, finding two technical errors. Ofgem found no evidence that Drax’s biomass is not sustainable or that Drax was issued ROCs incorrectly. Drax has agreed to voluntarily pay £25 million.

Ofgem’s Drax investigation finds no harm to consumers, Drax agrees to pay £25M into voluntary redress fund

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