Hinkley Point nuclear power station in Somerset, southwest England, will cost about £2bn more to build than previous estimates and will miss its deadline for completion.
Energy firm EDF released an update this morning that warns of an overspend of between £1.9bn and £2.9bn, putting total costs for the project at between £21.5bn and £22.5bn.
The company blamed "challenging ground conditions which made earthworks more expensive than anticipated, revised action plan targets and extra costs needed to implement the completed functional design."
Originally meant to be powering our ovens to cook the Christmas turkey in 2017, Hinkley Point C Unit 1 is now expected to starting feeding the National Grid in 2025.
EDF, which is building the 3.2 gigawatt plant with China General Nuclear Power Group, still expects to make a project rate return of between 7.6 per cent and 7.8 per cent on its investment.
The UK government has promised to pay EDF a fixed fee, subject to annual increases, of £92.50 (in 2012 prices) per megawatt-hour for 35 years.
The National Audit Office warned two years ago that the government had subjected the country to a "risky deal in a changing energy marketplace".
As costs for other low-carbon energy sources continue to fall, the terms of the deal look even worse. Wholesale prices can fluctuate wildly but are currently in the region of £40 per megawatt-hour. ®