Eggborough Power Station could become 'emergency back-up'
Eggborough could be used as an "emergency power station" to be switched back on at short notice.
The BBC understands the site, near Selby, North Yorkshire, may play a part in a future government plan to avoid electricity blackouts.
The 53-year-old coal-fired power station, which employs around 240 people, is due to stop generating power in March subject to consultations.
Neither Eggborough Power Ltd nor the government wished to comment.
Previously the firm said it could not rule out some redundancies at the site, though some roles might be required to support decommissioning.
The Department of Energy and Climate Change previously said the UK's energy security would be unaffected by the closure.
Peter Atherton, a utilities analyst at Jefferies Investment Bank, said: "Things are looking pretty tight, particularly next winter.
"Large coal-fired power stations have announced that they will shut in March.
"If all of that capacity does shut, we're probably looking at the lowest reserve margin that we have seen in our lifetimes."
Nigel Adams, Conservative MP for Selby and Ainsty, described the Eggborough talks as "potential good news".
He said: "It's too early to say whether it keeps the whole station open.
"I know this offer by the government, via the National Grid, is for two of Eggborough's units, but I'm really pleased."
He added: "We seem to be getting somewhere, but I don't want to raise too many hopes."