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 is 15 months late had risen.
In common with other major UK building projects, such as Crossrail and HS2, the power plant is over budget.
EDF last raised its estimate for the project in 2017, by £1.5bn.