A staff consultation about the closure of the Eggborough power station has started.
The station, located in North Yorkshire, is expected to stop generating energy by the end of March 2016 and around 240 jobs are at risk.
The decision to close depends on the outcome of the consultation and talks with government bodies.
The 2000MW coal-fired plant, which generates enough electricity to power two million homes, requires a £200 million funding over the next three years to continue operating.
The station claims it had previously failed in its attempts to get support from government to convert to biomass.
Neil O’Hara, Chief Executive of the plant said: “We are deeply saddened at the prospect of potentially ceasing generation at Eggborough Power Station and believe that Eggborough Power could have a significant part to play in ensuring security of supply in the UK electricity market, particularly while there remains great uncertainty around new-build gas-fired generation.
“We intend to conduct a thorough consultation process with our employees and their representatives while we continue to consider all options available to us, including seeking to engage with government bodies. Our priority is to support our staff during this difficult time.”