Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Accepted
Ofgem found misreporting by Drax, but confirmed legitimate subsidy receipts under existing thresholds.
Conclusion
Ofgem explained that the level of oversight is dictated by the size of the generator.17 At present, the largest recipient of financial support for biomass is Drax, the largest biomass electricity generator by some distance.18 While Ofgem did find misreporting in Drax’s 2021–22 annual returns, Ofgem told us that these breaches did not mean that Drax received subsidies 9 C&AG’s Report, para 1.6, 2.8 10 C&AG’s Report, para 1.15 11 C&AG’s Report, para 2.11 12 Q 4 13 Q 4 14 Letter from Drax, 17 March 2025 15 Bio0012, Bio0022 16 C&AG’s Report, paras 12 and 16 17 Q 19 18 C&AG’s Report, para 8 10 to which it was not entitled.19 Ofgem added that the subsidies received by Drax are based on “an enhanced assurance scheme” and that it was “very confident” the funding that Drax received was in line with the current threshold that 70% of woody biomass should be from sustainable sources.20 DESNZ was unable to say whether this would have been the case if a threshold of 100% sustainable biomass, which will apply to Drax and which is being considered more widely, had been in place.21
Government Response Summary
The government states that Ofgem's investigation into Drax, leading to a £25 million payment, proves the current assurance regime is working well, as breaches are investigated and actions taken.
Government Response
Accepted
HM Government
Accepted
1.5 Moreover, the recent Ofgem investigation into Drax’s sustainability reporting – which led to Drax making a £25 million voluntary redress payment – is evidence that the current assurance regime is working well. Breaches of sustainability reporting under the existing arrangements are thoroughly investigated, and robust action is taken when breaches are found.