French power company EDF said the new nuclear plant it is building at Hinkley Point C will cost up to £2.9bn more than thought.
It raised its estimate for the project, in Somerset, to between £21.5bn and £22.5bn, blaming "challenging ground conditions".
It also said the risk of the project being 15 months late had risen.
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These cost overruns will not hit UK consumers. However, a new way of paying for further nuclear stations, such as Sizewell, is being considered.
Under this new model, consumers would see costs of construction added to their bills as the project went along. It means that customers could be exposed to cost overruns.
That is why today's announcement is important and why EDF will find it harder to make the argument for building Sizewell.
