Nuclear energy from Hinkley Point C will may be delayed until almost 2029 because of the rampant inflation and increased requirements for materials and engineering.
French energy group EDF, which is behind the project on the west Somerset coast in south-west England, said this will mean the total costs of completion are now estimated at £25bn to £26bn, up £3bn from the previous range.
Compared to the initial estimate, the nuclear reactors are going to be at least £7bn more expensive and over three years late.
Under the terms of the contract for difference, there is "no impact for UK consumers", EDF said.
The French company, which is in talks with Downing Street to arrange financing for the Sizewell C nuclear plant, said the start of electricity generation for Unit 1 is still targeted for June 2027, but "the risk of further delay of the two units is assessed at 15 months, assuming the absence of a new pandemic wave and no additional effects of the war in Ukraine".
So far, construction has been delayed by 18 months, the bulk of which by the pandemic, EDF said.
It said "people, resources and supply chain have been severely constrained and their efficiency has been restricted" and "quantities of materials and engineering as well as the cost of such activities, including, in particular marine works have risen".
Prime Minister Boris Johnson recently said he want nuclear power to supply 25% of the UK's electricity needs in future.
Currently six nuclear power stations generate around 16% of the UK's electricity, though three of the plants are due to retire by March 2024 and all but one will retire by 2030.