Ofgem to investigate Drax compliance with biomass reporting rules

theguardian.com:

Drax is facing an investigation by the energy regulator into the sustainability of the biomass it uses at its wood-burning power plant amid growing scepticism over its green credentials.

The energy regulator, Ofgem, said it would investigate whether the owner of Britain’s biggest power plant, in North Yorkshire, was in breach of the reporting rules required for its renewable energy subsidy scheme.

Ofgem is expected to investigate the accuracy of the energy company’s sustainability reports relating to the sourcing of its wood pellets, 80% of which are imported from forests in the US and Canada.

The FTSE 250 company’s share price tumbled by about 6% to 553p after the regulator announced the investigation on Wednesday morning.

Ofgem said it opened the enforcement case after its investigations into the company’s sustainability reports and the controls it has put in place to guarantee its green claims. The regulator added that the opening of the new investigation did not imply it had found a breach of its rules, but it would stand ready to act if appropriate.

Drax has received billions in renewable energy subsidies for its biomass electricity while facing growing criticism over its “carbon neutral” claims and deepening scepticism over the sustainability of burning imported wood to generate electricity.

A spokesperson for Drax said it was confident its biomass was compliant with the criteria of the renewable subsidy scheme.

“Last year Drax appointed a third party to independently verify the accuracy of its biomass sustainability and profiling data as part of an ongoing process,” the company said in a statement. “Like all energy generators, Drax receives regular requests from Ofgem and continues to cooperate fully throughout this