In February 2025, the government announced it had agreed heads of terms for a deal to support Drax that will run from 2027 to 2031. As part of this deal, DESNZ has required Drax to source 100% of its fuel from sustainable sources, rather than the current 70%. DESNZ intends to appoint an independent sustainability adviser to support Ofgem and the Low Carbon Contracts Company to ensure that the assurance process is robust and keeps pace with the science.36 DESNZ recognised that if a target of 100% is set, a “tighter” assurance regime will be required which would require “quite extensive changes to the way we do things now”.37 DESNZ is working on exactly what these arrangements might be, and assured us that “they will be robust and we will include disincentives and penalties if sustainability requirements are not met.” 38 30 Ofgem press release Ofgem closes investigation into Drax Power Limited (29 August 2024) 31 Q 80 32 Ofgem statement Drax investigation and renewables obligation subsidies (12 March 2025) 33 Q 80 34 Ofgem press release Ofgem closes investigation into Drax Power Limited (29 August 2024) 35 Q 5; Ofgem press release Ofgem closes investigation into Drax Power Limited (29 August 2024) 36 Statement by the Secretary of State for Energy Security and Net Zero, UIN HCWS424, 10 February 2025 37 Q 14, 28 38 Q 30 12 Securing the supply of sustainable biomass