The Hinkley Point C nuclear power plant is already facing a £1.5bn cost over-run and delay of up to 15 months, the consortium behind the project has admitted.
The announcement was made by EDF Energy following a review of costs and the timetable for completion – just a week after the Government’s spending watchdog warned it was “risky and expensive” for consumers.
When the contract was signed, the cost of delivery was put at just over £18bn while it was scheduled to begin output in 2025.
EDF, which owns two-thirds of the project with China General Nuclear Power Group holding the rest, said completion costs were now estimated at £19.6bn when based on 2015 currency rates.
Image: EDF had reported ‘good progress’ in construction three months ago
It explained the extra money resulted mainly from a better understanding of the “design requirements of British regulators, the volume and sequencing of work on site and the gradual implementation of supplier contracts.”
As a result of the additional spending, EDF expected its rate of return to fall to 8.5% from 9%.
The company added that there was a chance of £700m in further costs if construction fell behind. EDF said there was a risk of over-runs of up to 15 months.
The announcement was made three months after “good progress” was reported by EDF.
It will embolden critics of the scheme who argue the plans for the twin reactor plant in Somerset are simply too complex and costly.
The reactor design has run into huge problems of cost overruns and delays at sites in France and Finland.
The National Audit Office warned last week that payments set to be added to consumer bills have soared from an estimated £6bn to £30bn.
Ministers argue it will provide 7% of the country’s electricity needs over 60 years and say Hinkley is a crucial cog in the UK’s energy mix.