An Australian company is seeking permission from the Northern Ireland electricity regulator for a 650 megawatt power station in Ballymoney, Co Antrim, which would cost up to £750 million.
Meekatharra Minerals, quoted on the Australian stock exchange, is seeking financial partners for the project which would take three years to build after receiving planning permission.
The company has a licence for a large open cast lignite mine outside the town which would be the source for the electricity.
Meekatharra said the mine contains up to 660 million tonnes of lignite reserves, which could power the plant for decades.
Mr James Quigg, a director of Meekatharra Northern Ireland, said, if the company received planning permission and approval from the regulator, Mr Douglas McIldoon, it would hope to supply electricity into the Republic's market.
He said he was confident the electricity produced from Ballymoney would be cheaper than most of the supplies currently available. From next year, 28 per cent of the Republic's electricity market will be liberalised and new suppliers like Meetharra will be allowed to supply larger customers.
It is understood representatives of Meekatharra have spent time in the Republic and have held meetings with some of the largest customers, which are currently supplied by the ESB.
From next year, Meekatharra will be among several companies looking to take customers from the ESB, while other players in the market are likely to be Northern Ireland Electricity and Scottish Power.
Another outlet for Meekatharra would be to sell its electricity through the interconnector (pipeline) between Northern Ireland and Scotland. Mr Quigg said this was being considered and he was confident the company's prices would be the crucial factor.
The investment to be made at the plant could happen in stages, said Mr Quigg, depending on what arrangements could be formed with other partners.
The regulator, Mr McIldoon, has already met executives from Meekatharra and is currently asking consultants from his office to examine the proposal. Mr Quigg said he did not know how long this might take.
The Ballymoney plant would be operated by Asea Brown Boveri (ABB), a Swedish engineering company, which has experience of working on lignite-based projects. Mr Quigg said the Meekatharra did not envisge much opposition from local people to the project as the site of the mine and plant is about 4 kilometres outside the town.
Mr Quigg estimated that about 1,500 people could be employed on the project, including several hundred from the local area.
The company stated that using lignite instead of conventional coal means lower greenhouse gas emissions.
