Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Deferred
Ofgem investigation found Drax misreported data due to poor governance, resulting in redress.
Conclusion
In August 2024, Ofgem published the outcome of its investigation into Drax.30 It told us that it had reviewed over 3,000 documents as part of its investigation.31 It also reviewed a report by KPMG, commissioned by Drax, which looked at its Canadian supply chain processes and reporting practices, from the forests of Western Canada to the power station in North Yorkshire.32 Ofgem concluded following its review of the KPMG report, that it was “content there were no points of illegality raised in there and no evidence that would suggest that Drax was wrong to receive its subsidies”. It also recognised that the report had been the “subject of intense interest”.33 Ofgem’s wider investigation. It concluded that an absence of adequate data governance and controls had contributed to Drax misreporting data and its inability to provide Ofgem with sufficient data to support a number of its submissions.34 Drax has accepted Ofgem’s findings and is making what Ofgem called a £25 million “redress payment”. Drax is also resubmitting its data for the period under investigation and is completing what Ofgem called “the most comprehensive audit of all of its biomass supply chain”.35
Government Response Summary
The government states that this is not a matter for the government to consider, and it is for Drax to decide whether they wish to release the KPMG reports, adding that Ofgem has already published significant detail.
Government Response
Deferred
HM Government
Deferred
2.9 This is not a matter for the government to consider. 2.10 The reports remain the property of Drax, and the government does not hold them. DESNZ officials were given temporary access to them to understand issues that have arisen in Drax’s supply chain processes and reporting, but it is important to recognise that the KPMG reports were commissioned by Drax as a confidential internal fact-finding exercise. It is therefore for Drax to decide whether they wish to release them to Parliament or the public. Ofgem has already published significant detail as to how this was considered as part of their investigation: Ofgem statement: Drax investigation and renewables obligation subsidies.