The two bidders remaining in the Arrium sale process are working on plans to upgrade a small co-generation power plant inside the Whyalla Steelworks, according to an article by the Australian Financial Review.
The plant would be able to deliver extra electricity into the broader South Australian power grid.
The Whyalla steelworks was among those businesses including BHP Billiton and OZ Minerals which were impacted by a power blackout in late September, 2016.
The Whyalla steelworks lost an estimated $10 million after it was without power for about a week while BHP Billiton's Olympic Dam mine suffered revenue losses of $135 million because it was without power for 15 days.
United Kingdom steel and commodities trading company, Liberty House, and South Korea's Posco are on the final shortlist to bid for Arrium and a winning bid is expected to be announced in early April.
Arrium administrators KordaMentha wouldn't comment on the bidding process or any specifics of the process, which is in its final stages.
KordaMentha principal Mark Mentha called a move by South Australian Premier Jay Weatherill to improve the reliability and stability of the electricity network in the state through his $550 million energy plan positive.
KordaMentha “welcomes any measures that improve the stability of power supply in South Australia," Mr Mentha said.
The Whyalla steelworks is able to produce about 40MWh of its own power under its current generation system centred on a boiler inside the steelworks.
South Australian Energy Minister Tom Koutsantonis said on Wednesday that he didn't want to go into specifics.
"It's at an advanced stage," he said.
An upgrade of co-generation plans had been on the table earlier in the process and potential buyers would be able to access funds from the Clean Energy Finance Corporation.
Mr Koutsantonis on Tuesday, when he and Premier Jay Weatherill unveiled the $550 million energy plan for the state, made a reference to all the potential Arrium bidders "talking about co-investment in co-generation".
He referred to South Korea's steelmaking firm Posco and its "Finex" process, of which gas was a by-product and which could be used in power generation.
"There are a lot of options for us to look at co-generation," Mr Koutsantonis said.