Drax Group Plc will pay £25 million ($32.9 million) after UK regulator Ofgem found that the company had misreported data about the biomass it burns in its power plant.
The data was technical and wouldn’t have affected subsidies received by the company, the regulator said in a report published Thursday. There was no evidence that Drax intentionally misreported the data, it noted.
The findings and the closure of the probe come at a critical time for Drax as it awaits decisions by the government about the extension of subsidies as well as new support to add carbon capture technology.
“There are no excuses for Drax’s admission that it did not comply with its mandatory requirement to give Ofgem accurate and robust data on the exact types of Canadian wood it utilizes,” said Jonathan Brearley, the regulator’s chief executive.
Drax accepted that it had weak procedures, controls and governance in place, resulting in inaccurate reporting of data about the forestry type and sawlog content used, he added.
Ofgem also found no evidence that Drax’s biomass failed to meet the threshold of 70% from “sustainable sources”, which is required to receive government subsidies.
Drax acknowledged in a separate statement that it will make the payment and will resubmit data. Shares in the company rose as much as 1.8%.