Construction work at the gas-fired plant in Spalding could now begin as early as next year.
The company behind the plans, Intergen, said the project could create 600 construction jobs over the three-year building programme.
The new development will sit alongside the existing site on West Marsh Road and will match its output.
It is thought the new power station will take about three years to build.
Charles Hendry, Minister for Energy, also gave the green light for a 56MW onshore wind farm on the Ray Estate near Kirkwhelpington, Northumberland