Drax power plant could lose subsidies over compliance concerns

Drax’s biomass power plant could lose subsidies if it is found not to be complying with sustainability requirements.

The House of Lords heard concerns over the environmental credentials of the site, near Selby, which burns biomass such as wood pellets.

Ofgem is investigating whether Drax has been complying with sustainability requirements.

The industry claims the wood burnt by Drax is sustainably sourced from forestry waste, but Labour peer Baroness Jones called for independent scientists to be sent to Canada to verify the sustainability of wood used to make biomass pellets.

The House of Lords heard that around £11bn in government subsidies has been given to Drax for its renewable schemes.

The energy regulator Ofgem said in May that it was investigating whether Drax Power Limited is in breach of “annual profiling reporting requirements relating to the Renewables Obligations scheme and other related matters”.

Addressing Lord Callanan, the Minister for Energy Efficiency and Green Finance, Baroness Jones said: “Is the minister concerned that Drax’s claim to be using sustainably-sourced wood from Canadian forests currently lacks any detailed full-cycle carbon accounting and audit trail that we would have the right to expect for that level of subsidy?”

In response, Lord Callanan said: “If it is proved that they are not in compliance, then of course some of the value of the certificates they have received will be withdrawn.

“Ofgem are investigating whether the biomass is sustainable or not. Let’s wait for the outcome of that investigation.”

Drax said: “We are confident in our business and operations and committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature and for the communities in which we operate.”