Finance
UK power group Drax not in breach of sustainability obligations, says Ofgem
Published by Global Banking & Finance Review®
Posted on March 12, 2025
2 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 12, 2025
2 min readLast updated: January 24, 2026
Ofgem confirms Drax met sustainability obligations, clearing them of breaches. Biomass plants must source 70% sustainably to qualify for certificates.
By Susanna Twidale
LONDON - British energy regulator Ofgem said on Wednesday that it had not found evidence of a breach of sustainability obligations by power company Drax, in the watchdog's review of reports prepared by auditor KPMG.
Renewable power generators in Britain can receive renewable obligation (RO) certificates which can then be sold to energy suppliers who use them to sell renewable electricity products to customers.
For biomass power plants to qualify for the certificates they must show at least 70% of their biomass fuel comes from sustainable sources.
Green groups have long criticised the sustainability credentials of biomass power plants, which burn wood pellets to generate electricity.
In 2023, regulator Ofgem opened an investigation into whether Drax was in breach of annual reporting requirements under the RO scheme.
Ofgem said it reviewed over 3,000 documents and did not find evidence to support claims that sustainability obligations had been breached.
Drax said the Ofgem statement shows that it meets sustainability criteria.
" The science underpinning biomass generation is supported by the world’s leading climate experts," a Drax spokesperson said in an emailed statement.
The government last month agreed to extend a subsidy scheme for the plants, which provide around 6% of Britain's electricity, from 2027-2031 but said they should only run when the power is really needed.
Drax paid 25 million pounds to Ofgem's voluntary redress fund last year after an investigation found the company did not have adequate data governance controls on biomass imported from Canada during the period from April 1, 2021 to March 31, 2022, although it said it had not found any evidence the biomass did not meet its sustainability requirements.
(Reporting by Susanna Twidale in London, additional reporting by Pushkala Aripaka in Bengaluru; Editing by Kirsten Donovan)
The article discusses Ofgem's investigation into Drax's compliance with sustainability obligations and the findings.
Drax was investigated to determine if it breached sustainability obligations under the renewable obligation scheme.
These certificates are awarded to renewable power generators in the UK, allowing them to sell renewable electricity products.
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