The group confirmed a report in the Financial Times, which said Ofgem was examining BBC claims over wood procured from Canada, to assess whether Drax complied with UK biomass sustainability rules that aim to curb emissions and protect biodiversity.
"Ofgem has recently informed Drax that it will commence an audit to verify the information the business provides to the regulator" regarding origin certification, a company spokesperson told AFP, stressing it was a "standard" process.
The watchdog, which also confirmed the probe, added that it regularly undertook additional checks on Drax's adherence to the sustainability scheme.
"Ofgem takes scheme compliance extremely seriously and where we identify or suspect that requirements are not being met we may decide to investigate further," an Ofgem spokesperson told AFP.
"This is an extra layer of assurance, over and above the requirements set out in regulations."
Separately on Wednesday, Drax posted news of a "strong" first-quarter performance and share buyback alongside its annual general meeting (AGM).
The news sent its share price soaring more than three percent on the London stock market.
Drax added Wednesday that its remaining two coal units had begun decommissioning in April.
The group has long planned to switch from coal to biomass wood pellets in a bid to tackle climate change -- but this has sparked outcry from the green lobby which disputes the environmental benefit.
Campaigners demonstrated outside Drax's AGM on Wednesday in anger over the group's policies.
"The reason that we're here is because Drax rebrand themselves as a renewable energy company and that they're a climate solution," biologist Abi Perrin told AFP.
"But this is really not the case. In fact, their activities are exacerbating the harm that's been caused to life around the world and to our carbon emissions, they're still increasing."
Fellow activist Delphine Holmon insisted that Drax was wrongly claiming to be green.
"The problem is that they are a model for the rest of the world to follow: 'this is a way of generating energy while still being green'," Holmon said outside the shareholders' gathering.
"If they are not challenged in the false process of generating power, of taking money under false pretences... it could spread to other areas."
Britain plans to scrap coal-powered electricity generation by October 2024, as part of its goal to achieve net zero carbon emissions by 2050.
However, the UK government prompted fury last year when it approved a new coal mine in Cumbria, northwest England, on the edge of the Lake District national park.
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