EDF, the French power group building the new nuclear power station at Hinkley Point has warned the project is already at least £1.5bn over budget and may be delivered more than a year late.
The admission comes just days after the UK’s National Audit Office described the £18bn nuclear power station in Somerset as ‘risky and expensive’.
An internal review of the project by EDF said the cost had now risen to £19.5bn with first power unlikely now before 2027, some ten years behind the date originally promised.
Delays to the first reactor have added £1.5bn to the cost, it said, while it faces a further £700mln charge as the second reactor is also well behind schedule.
A £2.2bn cost overrun would reduce EDF's return on the project to 8.2% from 9%.
The state-controlled is funding two-thirds of the project, with China investing the remaining £6bn.
Under the terms of 35-year contract, EDF is guaranteed a price of £92.50 per megawatt hour it generates or double the current market price.
Through this agreement thrashed out between EDF and the UK government, electricity customers will top up the French group’s income through a levy.
The NAO has predicted sliding prices on the wholesale market mean the cost this support has now soared from £6bn to £30bn.
EDF’s chief executive Edward de Rivaz is to be replaced in October, something that has added to the delays said the power supplier.