A City billionaire has urged Britain’s biggest ‘renewable’ power station to sack its boss, claiming the business is now as ‘toxic as working for tobacco’.
Louis Bacon, the American founder of hedge fund Moore Capital, lambasted energy company Drax’s ‘egregious’ failings in a scathing letter published on Tuesday, calling it an ‘environmental and ethical calamity’.
He called for chief executive Will Gardiner to be sacked just days after the City watchdog said it would investigate the company regarding the sourcing of wood pellets used in its biomass plant in North Yorkshire.
It is another embarrassment for Energy Secretary Ed Miliband after he agreed to extend subsidies for the company, which has long drawn fire from environmental groups.
Biomass power stations – which create electricity by burning resources such as wood – have long drawn criticism from campaigners, who say their claims of producing ‘renewable’ energy from imported pellets are exaggerated.
Drax was last year fined £25million by Ofgem for not reporting accurate sustainability data about the sourcing of its wood pellets.
In response to Bacon’s letter, the company told the Daily Mail and This is Money that Drax’s Board ‘has full confidence in Will Gardiner’ and he had led a transformation of the company.
Moore Capital has called for Drax to sack boss Will Gardiner
In a letter to Drax chair Andrea Bertone, Bacon criticised the company for awarding Mr Gardiner a £2m bonus despite this penalty.
And he claimed woody biomass ‘is more polluting than the coal that it replaced, and is creating enormous scars in some of [the] planet’s most sensitive eco systems’.
He described the group as causing ‘horror for green investors’ and said government subsidies were required because its energy generation process is ‘hopelessly inefficient’.
Drax’s most recent annual report suggested it received £869million in subsidies last year.
Bacon added: ‘For your staff, having Drax on their CVs is not a good look. Drax is as toxic as working for tobacco. Perhaps worse, given modern tobacco companies no longer lie about the death caused by their products.’
‘The horror for green investors is compounded by your chimneys generating more emissions than when they burnt coal.’
In 2023, Daily Mail and General Trust (DMGT) backed the launch of a venture fund Renown Capital Partners by Moore Capital Management to invest in energy transition companies.
Bacon provided financial support to Drax’s former top lobbyist Rowaa Ahmar, who was sacked after she raised concerns about so-called ‘greenwashing’ at the firm.
She was employed by the company in 2022, when the BBC’s Panorama programme alleged that it used wood from forests in Canada instead of waste wood.
Ms Ahmar claimed she was dismissed after raising concerns with senior figures that Drax had covered up its use of unsustainable material.
An employment tribunal was told she defied orders to stay quiet about the interim findings of a report, which her lawyers claimed found the firm had used unsustainable wood and misreported data to energy regulator Ofgem.
Drax denied the claims. It reached a settlement with Ms Ahmar days after the hearing began in March.
Moore Capital said it had closed out a short position in Drax in July 2024, before Bacon began providing support to Ms Ahmar.
The FCA’s investigation will cover the period January 2022 to March 2024 and related to ‘certain historical statements regarding Drax’s biomass sourcing and the compliance of Drax’s 2021, 2022 and 2023 Annual Reports’ with City rules on transparency. Drax has said it would ‘co-operate’ with the FCA investigation.
Matt Williams, senior advocate for the NRDC (Natural Resources Defense Council), said: ‘Whatever the outcome of any FCA investigation, there’s no escaping the fundamental problem with Drax.
‘There’s nothing low carbon about cutting down verdant American forests, shipping them hundreds of miles, and burning them in British power stations. In the southeast US this fills the air with wood pellet dust and leaves forests decimated. In the UK it sends billions of the public’s money up in smoke in the name of net zero.
‘Drax has been the subject of ongoing criticism and allegations from the National Audit Office, Public Accounts Committee, BBC Panorama, Ofgem, hundreds of scientists, the list goes on. But enough is enough. It’s time to end this greenwashing scam – the Government must phase out biomass once and for all.’
A Drax spokesperson said: ‘Drax’s Board has full confidence in Will Gardiner as CEO of the company. During Will’s tenure, he has led and grown the Group and delivered both record financial and operational performances, as well as having overseen the transformation of the company.
‘The Board has full confidence that Will is the best person to lead our business and expects he continues to do so for the years to come.
‘Louis Bacon’s hedge fund, Moore Capital Management, has previously held publicly disclosed short positions in Drax Group, seeing his firm potentially benefit from any decline in Drax’s share price.
‘Separately, his private charitable foundation has been a long-standing financial supporter of anti-biomass campaign groups, including the majority of those which make up Cut Carbon not Forests.
‘Louis Bacon privately funded an employment tribunal against Drax Group. The Daily Mail’s parent company, Daily Mail and General Trust, has a commercial relationship with Moore Capital Management through the Renown Capital Partners investment vehicle.’
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