Drax has had to pay £28m ($43m) for failing to meet emission targets set by the government’s Community Energy Saving Programme (CESP), which demanded that power generators and suppliers had to deliver energy saving measures to households in low-income areas by the end of December 2012.
Drax hit its carbon emissions target by 37.1 per cent, which Ofgem said “led to several thousand hou seholds in some of the most deprived areas in Britain missing out on energy saving measures which would have helped lower bills and keep homes warm”.
In a statement, Ofgem said that senior management at Drax “were aware of the serious risk of non-compliance with CESP 18 months before the end of the scheme”.
“While Ofgem has taken into account Drax’s inexperience in delivering energy efficiency measures to consumers and its lack of a customer base, the company could have taken more timely action to reduce the risk of not delivering its obligation.”
The regulator also said that after the deadline passed, “Drax made no attempt to mitigate the carbon saving shortfall”, which it added was a “significant factor in Ofgem’s decision”.
Also fined today for the same breach of CESP compliance was InterGen, which operates power plants across the wold, including three in England – Coryton in Essex, Rocksavage in Runcon and Spalding in Lincolnshire. InterGen delivered 6.4 per cent of its CESP obligation by the deadline.
The previous record financial penalty handed out by Ofgem was £15m to National Grid in 2010 over gas competition issues.