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Drax Power Station Fined £28 Million by Energy Regulator

Drax

12:13pm 28th November 2014

Drax power station near Selby has been fined £28 million by the energy regulator Ofgem for not doing enough to help poorer households save energy.

The energy provider only achieved 37.1% of it's energy saving target which Ofgem claims means that thousands of homes missed out on energy saving measures, such as free insulation and new boilers.

Drax will now pay £20 million to charity National Energy Action, for it to provide the energy saving help, and Drax also has to pay an £8 million fine to Ofgem.

The regulator points out that the fine could have been even higher if Drax had not agreed to settle the investigation.

Sarah Harrison from Ofgem said:

Drax missed its target by a clear margin, disadvantaging several thousand households in some of the most deprived areas in Britain. Not only are these consumers missing out on energy efficiency measures that would help keep their homes warm, they also face higher energy bills as a result. Today’s agreement to pay £28 million reflects the seriousness of the consequences of these failings for consumers.”

Drax points out that of ten energy firms which were committed to the programme to help customers save energy, six missed their target. Three of those were independent power stations like Drax. Another energy firm InterGen was also fined £11 million by Ofgem for the same reason as Drax.

Dorothy Thompson, Chief Executive of Drax said:

We take our statutory obligations very seriously and in the case of the CESP we always sought to maintain a compliant position. We believe the design of the CESP was flawed and significant problems were encountered with scheme delivery, the CESP market and the complex arrangements.

“We are deeply disappointed with the magnitude of the fine. However, we believe it is in our shareholders’ interests to settle this matter and, as the nation’s single largest power provider, focus on delivering a reliable supply of electricity this winter. 

“We are pleased to be working with National Energy Action to develop a package of measures which would benefit vulnerable energy consumers, which is in line with the original objectives of the CESP.

“Our core competence is in electricity generation and that is the best way for us to serve the needs of the UK in terms of carbon savings. Through undertaking the largest decarbonisation project in Europe, Drax will deliver carbon savings of around 12 million tonnes a year through burning sustainable biomass in place of coal. Our target under the CESP was to deliver carbon savings of less than one million tonnes over the lifetime of the energy efficiency measures. By comparison, our biomass conversion will deliver hundreds of millions of tonnes of carbon savings over the same time frame. It is clear to anyone where our efforts are best deployed.”

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