Biting the pellet
Drax , Issue 1661 Old Sparky writes… AS THE Financial Conduct Authority investigates potentially criminal misdeeds at tree-burning energy company Drax, information reaches the Eye which the FCA might add to its agenda.

The authority needs to establish whether known falsehoods in Drax pronouncements about the sustainability of its fuel sourcing were made deliberately, recklessly or negligently. So investigators will be interested to learn then that, when Drax acquired Canadian wood pellet manufacturer Pinnacle in 2021, Drax staff and advisers conducting due diligence on the transaction raised red flags concerning the sustainability of Pinnacle’s wood pellets which fuelled Drax, then as now; and Pinnacle’s “class 2” logging licences for felling whole, healthy trees.

Panorama revisited
Unsustainability of its Canadian sources was one of the accusations made in 2022’s BBC Panorama exposé. Drax immediately denied using unsustainable fuel, but was then told by its auditors that the allegation was true.

Drax subsequently failed to follow the advice of its lawyers to come clean (Eyes 1653 & 1658), as the FCA already knows. It might now like to call for the red-flag reports from the time of the Pinnacle acquisition.

Additionally, emails seen by the Eye show that senior Drax staff fact-finding in North America were briefed on these and other sustainability risks by environmental campaigners before the Pinnacle acquisition – evidence that key people at Drax knew of the issues when Panorama aired.

Whether those employees, some of whom still work at Drax, were involved in drafting the company’s outright but erroneous denials is not known.

Runaway Laurie
Meanwhile Laurie Fitzmaurice, well regarded in the industry and president of Elimini, Drax’s vehicle for overseas expansion, has been quietly sidelined into an “advisory” role. On arrival at Drax last year, she quickly made a mark by kiboshing its preposterous plan for up to 30 new developments each the size of Drax’s Selby plant – by far the UK’s largest power station – that originated from über-consultant McKinsey’s fantastical forecasts of global demand for tree-burning and carbon capture (Eye 1651).

Fitzmaurice’s much-needed realism didn’t go down well with beleaguered Drax CEO Will Gardiner, who dreamed of dominating a trillion-pound worldwide tree-burning market; nor with McKinsey, which is still omnipresent in Drax HQ.

Insiders report that former Drax chair Phil Cox, who left with many contentious issues unresolved last year (Eye 1639), is pestering senior management as to whether his name will be dragged into the company’s ongoing legal travails – as well he might, since they mostly stem from his period in office.