International Power plans to close a plant employing 32 staff in Shotton, north Wales, by the end of 2012.
The firm, 70 per cent owned by French utility GDF Suez, blamed growing competition from more efficient plants.
"Due to the commissioning of a number of highly efficient gas-fired power stations in the UK and the relatively low efficiency of Shotton CHP, this plant is no longer competitive in the UK wholesale electricity market," International Power said.
International Power said it would seek to relocate staff from the 210 megawatt combined heat and power (CHP) plant where possible.
The Shotton plant will remain fully available until plans for closure have been finalised, it added.
International Power was bought by GDF Suez to create the world's largest independent power producer.
The deal, announced in 2010, was completed last February.