Closure of Ofgem investigation

Drax Group PLC

29 August 2024

 

This announcement contains inside information

29 August 2024

Drax Group plc

("Drax"; Symbol: DRX)

Closure of Ofgem investigation into biomass profiling data

Drax ("the Group") notes that Ofgem has closed its investigation into the Group's biomass profiling data and issued a closure statement⁽¹⁾. Ofgem have confirmed that it did not find any evidence that the Group's biomass is not sustainable or that Drax has been issued with Renewable Obligation Certificates (ROCs) incorrectly.

Drax Group CEO, Will Gardiner said: "It is welcome that Ofgem has found no evidence that our biomass failed to meet the sustainability criteria of the Renewables Obligation (RO) scheme, nor that the ROCs we received for the renewable power we produced had been provided incorrectly. Although Ofgem has noted there is no evidence to suggest Drax deliberately misreported its profiling data, we recognise the importance of maintaining a strong evidence base and are continuing to invest to improve confidence in our future reporting."

The investigation found that Drax had process gaps in relation to two aspects of its profiling data for Canada in the period April 2021 to March 2022 (CP20). Ofgem notes that this was technical in nature and would not have impacted the level of ROCs earned by Drax under the Renewable Obligation scheme. Annual profiling data is the reporting of 'additional biomass characteristics' and is not used for the issuing of ROCs.

In April 2021 Drax acquired Pinnacle Renewable Energy ("Pinnacle"), which represents the majority of the Group's activity in Canada and c.14% of the biomass delivered to Drax Power Station during CP20. The Group is committed to continued development and improvement of its activities, and since the acquisition of Pinnacle Drax has invested to deliver improvements, which it believes have enhanced its overall reporting.

Throughout the process Drax has co-operated fully with Ofgem. No harm has been caused to the consumer, but in recognition of Ofgem's findings, Drax will make a payment of £25 million into Ofgem's voluntary redress fund. Drax will also resubmit its CP20 profiling data for Canada and produce an independent audit of its biomass profiling data for the most recent reporting period, April 2023 to March 2024 (CP22).

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). The person responsible for the release of this information was Brett Gladden (Group Company Secretary).

Notes

(1) Ofgem investigating Drax Power Limited's compliance with reporting requirements relating to the Renewables Obligation | Ofgem

Enquiries:

Drax Investor Relations:

Mark Strafford

[phone]

Chris Simpson

[phone]

Media:

Drax External Communications: Andy Low

[phone]

Website: www.drax.com

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