Cost of four new Kudankulam reactors jumps 55% after Ukraine war delays

The cost of adding four Russian-designed nuclear reactors at the Kudankulam plant in southern India has surged by more than half after the war in Ukraine pushed back construction by almost three years.

The four reactors of 1 gigawatt each are now estimated to cost 1.38 trillion rupees ($14.4 billion), according to a written reply to parliament by Atomic Energy Minister Jitendra Singh on Wednesday. That is 55% more than the estimates published in 2024.

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Steep cost escalations and holdups are symptomatic of the challenges faced by the sector. Similar projects from the US and the UK to Bangladesh have also suffered due to a sharp increase in expenditure after construction delays. Georgia’s Vogtle plant, the first nuclear project built in the US in decades, was delivered years behind schedule at more than double its original budget.

The projected expenditure for two of the new Kudankulam reactors has risen by 73% while the estimate for the remaining increased by 40%, federal government data showed. The cost overruns will make electricity generated by these plants more expensive, posing hurdles for nuclear expansion in India’s price-sensitive power market.

“While nuclear is important for climate risk mitigation and energy security, costs need to be contained,” said Rupesh Sankhe, senior vice president for research at Elara Capital India Pvt Ltd., adding that this may dent the plant’s competitiveness compared to other sources of power. “Very high costs only enforce the anti-nuclear argument and can create further opposition to projects.”

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India has installed two Russian reactors of 1-gigawatt capacity each at Kudankulam, a coastal town near the southern most tip of the country, and construction is ongoing for four more. The new reactors will be commissioned through March 2030, with the first expected to start operations in June next year, according to Singh. The government had earlier said that all these reactors will be completed by 2027.

The costs for building four 700-megawatt domestic reactors, two each at Kaiga in Karnataka and Gorakhpur in Haryana, are also set to be revised, Singh informed the parliament on Wednesday.

India currently has 8.8 gigawatts of nuclear power capacity which contributes to about 3% of the country’s power output. Last year, the government opened up the sector to private firms, pursuing an ambitious goal of expanding the country’s nuclear generation capacity eleven-fold by 2047.